Company Quick10K Filing
Price56.97 EPS-0
Shares52 P/E-145
MCap2,988 P/FCF48
Net Debt-72 EBIT-51
TEV2,916 TEV/EBIT-57
TTM 2019-09-30, in MM, except price, ratios
10-Q 2021-03-31 Filed 2021-05-07
10-K 2020-12-31 Filed 2021-02-26
10-Q 2020-09-30 Filed 2020-11-06
10-Q 2020-06-30 Filed 2020-08-10
10-Q 2020-03-31 Filed 2020-05-08
10-K 2019-12-31 Filed 2020-02-28
10-Q 2019-09-30 Filed 2019-11-08
10-Q 2019-06-30 Filed 2019-08-08
10-Q 2019-03-31 Filed 2019-05-09
10-K 2018-12-31 Filed 2019-03-01
10-Q 2018-09-30 Filed 2018-11-08
10-Q 2018-06-30 Filed 2018-08-08
10-Q 2018-03-31 Filed 2018-05-10
10-K 2017-12-31 Filed 2018-02-28
10-Q 2017-09-30 Filed 2017-11-09
10-Q 2017-06-30 Filed 2017-08-09
10-Q 2017-03-31 Filed 2017-05-10
10-K 2016-12-31 Filed 2017-03-24
10-Q 2016-09-30 Filed 2016-11-09
10-Q 2016-06-30 Filed 2016-08-09
10-Q 2016-03-31 Filed 2016-05-06
10-K 2015-12-31 Filed 2016-02-29
10-Q 2015-09-30 Filed 2015-11-09
10-Q 2015-06-30 Filed 2015-08-10
10-Q 2015-03-31 Filed 2015-05-08
10-K 2014-12-31 Filed 2015-03-02
10-Q 2014-09-30 Filed 2014-11-07
10-Q 2014-06-30 Filed 2014-08-11
10-Q 2014-03-31 Filed 2014-05-09
10-K 2013-12-31 Filed 2014-03-17
10-Q 2013-09-30 Filed 2013-11-07
10-Q 2013-06-30 Filed 2013-08-09
10-Q 2013-03-31 Filed 2013-06-14
10-K 2013-03-31 Filed 2013-06-14
10-Q 2012-09-30 Filed 2012-11-08
10-Q 2012-06-30 Filed 2012-08-09
10-Q 2012-03-31 Filed 2012-05-09
10-K 2011-12-31 Filed 2012-03-09
10-Q 2011-09-30 Filed 2011-11-09
10-Q 2011-06-30 Filed 2011-08-10
10-Q 2011-03-31 Filed 2011-05-06
10-K 2010-12-31 Filed 2011-03-18
10-Q 2010-09-30 Filed 2010-11-05
10-Q 2010-06-30 Filed 2010-09-03
8-K 2020-11-05
8-K 2020-10-29
8-K 2020-08-17
8-K 2020-08-17
8-K 2020-08-17
8-K 2020-08-06
8-K 2020-06-26
8-K 2020-05-14
8-K 2020-05-07
8-K 2020-03-30
8-K 2020-02-20
8-K 2019-12-06
8-K 2019-11-07
8-K 2019-10-03
8-K 2019-09-27
8-K 2019-08-07
8-K 2019-07-11
8-K 2019-05-16
8-K 2019-05-08
8-K 2019-05-01
8-K 2019-04-01
8-K 2019-03-14
8-K 2019-02-21
8-K 2019-01-09
8-K 2018-12-20
8-K 2018-11-27
8-K 2018-11-07
8-K 2018-10-24
8-K 2018-08-07
8-K 2018-05-25
8-K 2018-05-24
8-K 2018-05-22
8-K 2018-05-21
8-K 2018-05-10
8-K 2018-05-09
8-K 2018-02-22
8-K 2018-01-02

ENV 10Q Quarterly Report

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-10.1 env20210331ex101.htm
EX-10.2 env20210331ex102.htm
EX-10.3 env20210331ex103.htm
EX-31.1 env20210331ex311.htm
EX-31.2 env20210331ex312.htm
EX-32.1 env20210331ex321.htm
EX-32.2 env20210331ex322.htm

Envestnet Earnings 2021-03-31

Balance SheetIncome StatementCash Flow
Assets, Equity
Rev, G Profit, Net Income
Ops, Inv, Fin


Washington, D.C. 20549
For the quarterly period ended March 31, 2021
For the transition period from __________ to __________
Commission file number 001-34835
Envestnet, Inc.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of
incorporation or organization)
(I.R.S Employer
Identification No.)
35 East Wacker Drive, Suite 2400, Chicago, Illinois
(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.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes   No 
As of April 30, 2021, Envestnet, Inc. had 54,422,622 shares of common stock outstanding.


Envestnet, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share information)
March 31,December 31,
Current assets:
Cash and cash equivalents$371,977 $384,565 
Fees receivable, net79,293 80,064 
Prepaid expenses and other current assets37,751 40,570 
Total current assets489,021 505,199 
Property and equipment, net51,077 47,969 
Internally developed software, net105,288 96,501 
Intangible assets, net443,023 435,041 
Goodwill906,756 906,773 
Operating lease right-of-use assets, net99,231 105,249 
Other non-current assets48,592 47,558 
Total assets$2,142,988 $2,144,290 
Liabilities and Equity
Current liabilities:
Accrued expenses and other liabilities$136,417 $158,548 
Accounts payable24,567 18,003 
Operating lease liabilities13,270 13,649 
Contingent consideration11,746 11,251 
Deferred revenue42,921 34,918 
Total current liabilities228,921 236,369 
Long-term debt845,195 756,503 
Non-current operating lease liabilities109,458 112,182 
Deferred tax liabilities, net23,042 34,740 
Other non-current liabilities22,643 28,678 
Total liabilities1,229,259 1,168,472 
Commitments and contingencies
Stockholders’ equity:
Preferred stock, par value $0.005, 50,000,000 shares authorized; no shares issued and outstanding as of March 31, 2021 and December 31, 2020
Common stock, par value $0.005, 500,000,000 shares authorized; 68,315,098 and 67,832,706 shares issued as of March 31, 2021 and December 31, 2020, respectively; 54,404,659 and 54,093,535 shares outstanding as of March 31, 2021 and December 31, 2020, respectively
341 339 
Additional paid-in capital1,072,839 1,166,774 
Accumulated deficit(36,338)(79,912)
Treasury stock at cost, 13,910,439 and 13,739,171 shares as of March 31, 2021 and December 31, 2020, respectively
Accumulated other comprehensive loss(1,022)(398)
Total stockholders’ equity914,141 976,337 
Non-controlling interest(412)(519)
Total equity913,729 975,818 
Total liabilities and equity$2,142,988 $2,144,290 
See accompanying notes to unaudited Condensed Consolidated Financial Statements.

Envestnet, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share information)
Three Months Ended
March 31,
Asset-based$159,375 $134,811 
Subscription-based109,829 104,551 
Total recurring revenues269,204 239,362 
Professional services and other revenues5,901 7,177 
Total revenues275,105 246,539 
Operating expenses:
Cost of revenues92,869 74,933 
Compensation and benefits100,714 110,430 
General and administration36,315 41,110 
Depreciation and amortization28,392 27,683 
Total operating expenses258,290 254,156 
Income (loss) from operations16,815 (7,617)
Other expense, net(7,468)(1,537)
Income (loss) before income tax benefit9,347 (9,154)
Income tax benefit(5,588)(1,964)
Net income (loss)14,935 (7,190)
Add: Net (income) loss attributable to non-controlling interest11 (146)
Net income (loss) attributable to Envestnet, Inc.$14,946 $(7,336)
Net income (loss) per share attributable to Envestnet, Inc.:
Basic$0.28 $(0.14)
Diluted$0.27 $(0.14)
Weighted average common shares outstanding:
Basic54,208,469 53,016,511 
Diluted59,917,648 53,016,511 

See accompanying notes to unaudited Condensed Consolidated Financial Statements.

Envestnet, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(in thousands)
Three Months Ended
March 31,
Net income (loss) attributable to Envestnet, Inc.
$14,946 $(7,336)
Foreign currency translation losses, net of taxes(624)(3,024)
Comprehensive income (loss) attributable to Envestnet, Inc.$14,322 $(10,360)

See accompanying notes to unaudited Condensed Consolidated Financial Statements.


Envestnet, Inc.
Condensed Consolidated Statements of Stockholders' Equity
(in thousands, except share information)
Common StockTreasury StockAdditionalOtherNon-
SharesAmountSharesAmountCapitalIncome (Loss)DeficitInterestEquity
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 (See Note 2)
— — — — (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 

Balance, December 31, 201966,320,706 $331 (13,479,000)$(90,965)$1,037,141 $(1,749)$(75,664)$(1,518)$867,576 
Adoption of ASC 326, net of taxes— — — — — — (1,141)— (1,141)
Exercise of stock options357,974 2 — — 3,406 — — — 3,408 
Issuance of common stock - vesting of restricted stock units398,881 2 — — — — — — 2 
Stock-based compensation expense— — — — 13,765 — — — 13,765 
Shares withheld to satisfy tax withholdings— — (130,164)(9,199)— — — — (9,199)
Foreign currency translation loss, net of taxes— — — — — (3,024)— — (3,024)
Net income (loss)— — — — — — (7,336)146 (7,190)
Balance, March 31, 202067,077,561 $335 (13,609,164)$(100,164)$1,054,312 $(4,773)$(84,141)$(1,372)$864,197 

See accompanying notes to unaudited Condensed Consolidated Financial Statements.

Envestnet, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
Three Months Ended
March 31,
Net income (loss) $14,935 $(7,190)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization28,392 27,683 
Provision for doubtful accounts298 1,026 
Deferred income taxes(3,581)(1,587)
Non-cash compensation expense14,137 15,985 
Non-cash interest expense2,015 4,463 
Accretion on contingent consideration and purchase liability388 599 
Fair market value adjustment to contingent consideration liability(140) 
Gain on acquisition of equity method investment (4,230)
Loss allocation from equity method investments3,288 2,030 
Changes in operating assets and liabilities, net of acquisitions:
Fees receivable, net473 (14,333)
Prepaid expenses and other current assets1,756 (6,793)
Other non-current assets3,093 641 
Accrued expenses and other liabilities(28,668)(11,554)
Accounts payable6,444 (3,205)
Deferred revenue7,882 5,598 
Other non-current liabilities(1,068)(145)
Net cash provided by operating activities49,809 8,988 
Purchases of property and equipment(7,062)(2,160)
Capitalization of internally developed software(15,058)(11,572)
Investments in private companies(2,538)(11,700)
Acquisition of proprietary technology(25,517) 
Acquisitions of businesses, net of cash acquired (20,257)
Net cash used in investing activities(50,175)(45,689)



Envestnet, Inc.
Condensed Consolidated Statements of Cash Flows (continued)
(in thousands)
Three Months Ended
March 31,
Proceeds from borrowings on revolving credit facility 45,000 
Payments on revolving credit facility (15,000)
Payments of contingent consideration(1,000) 
Proceeds from exercise of stock options522 3,408 
Taxes paid in lieu of shares issued for stock-based compensation(9,541)(9,199)
Share repurchase(1,672) 
Net cash (used in) provided by financing activities(12,170)24,211 
(See Note 2)
$372,126 $68,769 
Supplemental disclosure of cash flow information - net cash paid during the period for income taxes$1,879 $814 
Supplemental disclosure of cash flow information - cash paid during the period for interest2,200 2,740 
Supplemental disclosure of non-cash operating, investing and financing activities:
Contingent consideration issued in acquisition of businesses 5,239 
Purchase liabilities included in accrued expenses and other liabilities 375 
Purchase liabilities included in other non-current liabilities 257 
Purchase of fixed assets included in accounts payable and accrued expenses and other liabilities1,129 1,752 
Membership interest liabilities included in other non-current liabilities124 2,220 
Leasehold improvements funded by lease incentive127 894 

See accompanying notes to unaudited Condensed Consolidated Financial Statements.


Table of Contents
Envestnet, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements

1.Organization and Description of Business

Envestnet, Inc. (“Envestnet”) through its subsidiaries (collectively, the “Company”) is transforming the way financial advice and wellness are delivered. Its mission is to empower advisors and financial service providers with innovative technology, solutions and intelligence to make financial wellness a reality for everyone. Through a combination of platform enhancements, partnerships and acquisitions, Envestnet provides a unique financial network connecting technology, solutions and data, delivering better intelligence and enabling its customers to drive better outcomes.

Envestnet is organized around two primary, complementary business segments. Financial information about each business segment is contained in “Note 14—Segment Information” to the condensed consolidated financial statements.

2.Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of the Company as of March 31, 2021 and for the three months ended March 31, 2021 and 2020 have not been audited by an independent registered public accounting firm. These unaudited condensed consolidated financial statements have been prepared on the same basis as our audited consolidated financial statements for the year ended December 31, 2020 and reflect all normal recurring adjustments which are, in the opinion of management, necessary to present fairly the Company’s financial position as of March 31, 2021 and the results of operations, equity, comprehensive income (loss) and cash flows for the periods presented herein. The unaudited condensed consolidated financial statements include the accounts of the Company. All significant intercompany transactions and balances have been eliminated in consolidation. Accounts for the Envestnet Wealth Solutions segment that are denominated in a non-U.S. currency have been re-measured using the U.S. dollar as the functional currency. Certain accounts within the Envestnet Data & Analytics segment are recorded and measured in foreign currencies. The assets and liabilities for those subsidiaries with a functional currency other than the U.S. dollar are translated at exchange rates in effect at the balance sheet date, and revenues and expenses are translated at average exchange rates. Differences arising from these foreign currency translations are recorded in the unaudited condensed consolidated balance sheets as accumulated other comprehensive income (loss) within stockholders' equity. The Company is also subject to gains and losses from foreign currency denominated transactions and the remeasurement of foreign currency denominated balance sheet accounts, both of which are included in other expense, net in the condensed consolidated statements of operations.

The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the operating results to be expected for other interim periods or for the full fiscal year.

The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. References to GAAP in these notes are to the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification, sometimes referred to as the codification or “ASC.” These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 26, 2021.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates.

Table of Contents
Envestnet, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements (continued)
The following table reconciles cash, cash equivalents and restricted cash from the condensed consolidated balance sheets to amounts reported within the condensed consolidated statements of cash flows:
March 31,March 31,
(in thousands)
Cash and cash equivalents$371,977 $68,601 
Restricted cash included in other non-current assets149 168 
Total cash, cash equivalents and restricted cash$372,126 $68,769 
Financial Impacts Related To COVID-19

On March 11, 2020, the World Health Organization declared the outbreak of COVID-19, a novel strain of Coronavirus, a global pandemic. This outbreak continues to cause major disruptions to businesses and markets worldwide as the virus spreads. The extent of the effect on the Company’s operational and financial performance will continue to depend on future developments, including the duration, spread and intensity of the pandemic, and governmental, regulatory and private sector responses, all of which are uncertain and difficult to predict. Although the Company is unable to estimate the overall financial effect of the pandemic at this time, as the pandemic continues, it could have a material adverse effect on the Company’s business, results of operations, financial condition and cash flows. As of March 31, 2021, these condensed consolidated financial statements do not reflect any adjustments as a result of the pandemic.

Related Party Transactions

The Company has a 4.3% membership interest in a private services company that it accounts for using the equity method of accounting and is considered to be a related party. Revenues from the private services company totaled $3.8 million and $2.7 million in the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021 and December 31, 2020, the Company had recorded a net receivable of $2.6 million and $2.1 million, respectively, from the private services company.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements—In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This update aims to reduce complexity within the accounting for income taxes as part of the simplification initiative. This standard is effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2020. These changes became effective for the Company's fiscal year beginning January 1, 2021. This standard will be applied prospectively. Adoption of this standard did not have a material impact on the Company's consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity.” This update simplifies the accounting for certain convertible instruments by reducing the number of accounting models available for convertible debt instruments and revises Topic 815-40, which provides guidance on how an entity must determine whether a contract qualifies for a scope exception from derivative accounting. Under the new guidance, the embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, or that do not result in substantial premiums accounted for as paid-in capital. The convertible debt instruments will be accounted for as a single liability measured at amortized cost. In addition, the new guidance requires the if-converted method to be applied for all convertible instruments. This standard is effective for financial statements issued by public companies for annual and interim periods beginning after December 15, 2021. Early adoption of the standard is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Adoption of the standard requires using either a modified retrospective or a full retrospective approach.

The Company has early adopted this standard as of January 1, 2021 using the modified retrospective approach. Adoption of this standard resulted in a decrease to accumulated deficit of $28.6 million (net of $0.9 million in taxes), a decrease to paid-in capital of $108.5 million (net of $6.7 million in taxes) and an increase to Convertible Notes of $87.5 million. Interest

Table of Contents
Envestnet, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements (continued)
expense recognized in future periods is expected to be reduced as a result of accounting for the convertible debt instrument as a single liability measured at its amortized cost, with an expected decrease of approximately $22.1 million in 2021 as a result of the adoption. The adoption of ASU 2020-06 had no impact on the Company's consolidated statements of cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

3.Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following:
March 31,December 31,
(in thousands)
Prepaid technology$16,162 $13,165 
Non-income tax receivables7,259 6,571 
Prepaid insurance2,069 1,777 
Advance payroll taxes and benefits995 6,429 
Income tax prepayments and receivables3,087 1,684 
Other8,179 10,944 
Total prepaid expenses and other current assets$37,751 $40,570 
4.Property and Equipment, Net
Property and equipment, net consisted of the following:
  March 31,December 31,
 Estimated Useful Life20212020
(in thousands)
Computer equipment and software3 years$73,176 $72,443 
Leasehold improvementsShorter of the lease term or useful life of the asset41,925 37,671 
Office furniture and fixtures
3-7 years
12,180 11,249 
Office equipment and other
3-5 years
6,858 7,151 
Building and building improvements
7-39 years
2,669 2,669 
LandNot applicable940 940 
  137,748 132,123 
Less: accumulated depreciation and amortization(86,671)(84,154)
Total property and equipment, net$51,077 $47,969 
During the three months ended March 31, 2021, the Company retired property and equipment that was no longer in service for the Envestnet Wealth Solutions segment with an historical cost of $2.7 million. During the three months ended March 31, 2021, the Company retired property and equipment that was no longer in service for the Envestnet Data & Analytics segment with an historical cost of $0.4 million.

During the three months ended March 31, 2020, the Company retired an immaterial amount of property and equipment that was no longer in service.

Gains and losses on asset retirements during the three months ended March 31, 2021 and 2020 were not material.
Depreciation and amortization expense was as follows:
 Three Months Ended
 March 31,
(in thousands)
Depreciation and amortization expense$5,643 $5,317 

Table of Contents
Envestnet, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements (continued)
5.Internally Developed Software
Internally developed software, net consisted of the following:
  March 31,December 31,
 Estimated Useful Life20212020
(in thousands)
Internally developed software5 years$174,677 $159,619 
Less: accumulated amortization (69,389)(63,118)
Internally developed software, net $105,288 $96,501 
Amortization expense was as follows:
 Three Months Ended
 March 31,
(in thousands)
Amortization expense$6,271 $3,608 
6.Intangible Assets, Net 
Intangible assets, net consisted of the following:
 March 31, 2021December 31, 2020
 Gross NetGross Net
(in thousands)
Customer lists$591,520 $(210,466)$381,054 $591,520 $(198,555)$392,965 
Proprietary technologies78,424 (29,334)49,090 54,914 (26,949)27,965 
Trade names33,700 (20,821)12,879 33,700 (19,589)14,111 
Total intangible assets$703,644 $(260,621)$443,023 $680,134 $(245,093)$435,041 

There were no material retirements of intangible assets during the three months ended March 31, 2021 and 2020.

Amortization expense was as follows:
 Three Months Ended
 March 31,
(in thousands)
Amortization expense$16,478 $18,758 

Acquisition of Proprietary Technology

The Company previously owned approximately 29% of the outstanding units in a privately held company and accounted for it as an equity method investment. On March 11, 2021, the Company entered into an intellectual property purchase agreement with this privately held company to acquire all of the proprietary technology developed by the privately held company for approximately $35.5 million. Concurrent with the intellectual property purchase agreement, the Company also entered into a redemption agreement with the same privately held company to redeem its previously held equity interest for approximately $10.0 million. The Company accounted for these two arrangements as a single unit of account. As of the acquisition date, the net cost of the proprietary technology acquired, including capitalized transaction costs, was approximately $24.5 million, which will be amortized over a five-year period on a straight-line basis. The proprietary technology has been integrated into the Envestnet Wealth Solutions segment.


Table of Contents
Envestnet, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements (continued)
7.Accrued Expenses and Other Liabilities
Accrued expenses and other liabilities consisted of the following:
March 31,December 31,
(in thousands)
Accrued investment manager fees$66,314 $57,894 
Accrued compensation and related taxes39,900 71,039 
Non-income tax payables6,400 8,398 
Accrued professional services6,255 9,240 
Accrued technology4,955 4,701 
Accrued purchase consideration3,887  
Other accrued expenses8,706 7,276 
Total accrued expenses and other liabilities$136,417 $158,548 

In the fourth quarter of 2020, as part of an organizational realignment, the Company entered into separation agreements with several employees. In connection with this realignment, the Company recognized $3.8 million of severance expense in the three months ended March 31, 2021. The Company has approximately $4.6 million and $5.1 million in accrued compensation and related taxes associated with these separation agreements as of March 31, 2021 and December 31, 2020, respectively.
The Company’s outstanding debt obligations as of March 31, 2021 and December 31, 2020 were as follows: 
 March 31,December 31,
(in thousands)
Revolving credit facility balance$ $ 
Convertible Notes due 2023$345,000 $345,000 
Unamortized issuance costs on Convertible Notes due 2023(4,503)(4,306)
Unaccreted discount on Convertible Notes due 2023 (24,058)
Convertible Notes due 2023 carrying value$340,497 $316,636 
Convertible Notes due 2025$517,500 $517,500 
Unamortized issuance costs on Convertible Notes due 2025(12,802)(11,731)
Unaccreted discount on Convertible Notes due 2025 (65,902)
Convertible Notes due 2025 carrying value$504,698 $439,867 

Interest expense was comprised of the following and is included in other expense, net in the condensed consolidated statement of operations:
 Three Months Ended
 March 31,
(in thousands)
Coupon interest$2,479 $1,501 
Amortization of issuance costs1,423