EX-99.2 3 ex-992earningsreleaseq.htm EXHIBIT 99.2 Exhibit


Exhibit 99.2
Blucora, Inc.
Supplemental Information
December 31, 2019
Table of Contents
 

1



Blucora Consolidated Financial Results (1) 
(in thousands except %s and per share amounts, rounding differences may exist)
2017
 
2018
 
2019
FY 12/31
 
1Q
 
2Q
 
3Q
 
4Q
 
FY 12/31
 
1Q
 
2Q
 
3Q
 
4Q
 
FY 12/31
Segment revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Wealth Management
$
348,620

 
$
92,082

 
$
92,015

 
$
91,887

 
$
97,190

 
$
373,174

 
$
89,532

 
$
127,831

 
$
145,428

 
$
145,188

 
$
507,979

Tax Preparation (2)
160,937

 
113,883

 
65,833

 
3,498

 
4,068

 
187,282

 
136,236

 
65,909

 
3,588

 
4,233

 
209,966

Total
$
509,557

 
$
205,965

 
$
157,848

 
$
95,385

 
$
101,258

 
$
560,456

 
$
225,768

 
$
193,740

 
$
149,016

 
$
149,421

 
$
717,945

Segment income (loss): (3)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Wealth Management
$
50,916

 
$
13,075

 
$
12,954

 
$
12,891

 
$
14,133

 
$
53,053

 
$
11,540

 
$
16,979

 
$
20,631

 
$
19,142

 
$
68,292

Tax Preparation (2)
72,921

 
58,806

 
44,121

 
(6,936
)
 
(8,742
)
 
87,249

 
79,272

 
41,368

 
(12,075
)
 
(12,316
)
 
96,249

Total
$
123,837

 
$
71,881

 
$
57,075

 
$
5,955

 
$
5,391

 
$
140,302

 
$
90,812

 
$
58,347

 
$
8,556

 
$
6,826

 
$
164,541

Segment income (loss) % of revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Wealth Management
15
%
 
14
%
 
14
%
 
14
 %
 
15
 %
 
14
%
 
13
%
 
13
%
 
14
 %
 
13
 %
 
13
%
Tax Preparation (2)
45
%
 
52
%
 
67
%
 
(198
)%
 
(215
)%
 
47
%
 
58
%
 
63
%
 
(337
)%
 
(291
)%
 
46
%
Total
24
%
 
35
%
 
36
%
 
6
 %
 
5
 %
 
25
%
 
40
%
 
30
%
 
6
 %
 
5
 %
 
23
%
Unallocated corporate operating expenses (3)
$
22,907

 
$
5,541

 
$
4,238

 
$
4,572

 
$
6,144

 
$
20,495

 
$
7,105

 
$
6,221

 
$
6,476

 
$
7,559

 
$
27,361

Adjusted EBITDA (4)
$
100,930

 
$
66,340

 
$
52,837

 
$
1,383

 
$
(753
)
 
$
119,807

 
$
83,707

 
$
52,126

 
$
2,080

 
$
(733
)
 
$
137,180

Other unallocated operating expenses: (3)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock-based compensation
$
11,653

 
$
2,955

 
$
3,730

 
$
2,874

 
$
3,694

 
$
13,253

 
$
2,443

 
$
4,082

 
$
4,639

 
$
5,136

 
$
16,300

Acquisition and integration costs

 

 

 

 

 

 
1,797

 
9,183

 
6,759

 
8,024

 
25,763

Depreciation
4,137

 
2,002

 
1,124

 
930

 
947

 
5,003

 
1,310

 
1,662

 
1,811

 
2,068

 
6,851

Amortization of acquired intangible assets
34,002

 
8,357

 
8,855

 
8,271

 
8,103

 
33,586

 
8,044

 
9,169

 
10,082

 
10,062

 
37,357

Impairment of intangible asset

 

 

 

 

 

 

 

 
50,900

 

 
50,900

Restructuring
3,101

 
289

 
2

 

 
(3
)
 
288

 

 

 

 

 

Operating income (loss)
$
48,037

 
$
52,737

 
$
39,126

 
$
(10,692
)
 
$
(13,494
)
 
$
67,677

 
$
70,113

 
$
28,030

 
$
(72,111
)
 
$
(26,023
)
 
$
9

Unallocated other income/loss: (3)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
$
(110
)
 
$
(40
)
 
$
(58
)
 
$
(119
)
 
$
(132
)
 
$
(349
)
 
$
(140
)
 
$
(149
)
 
$
(52
)
 
$
(108
)
 
$
(449
)
Interest expense
21,211

 
4,181

 
3,847

 
3,744

 
3,838

 
15,610

 
3,776

 
4,770

 
5,469

 
5,002

 
19,017

Amortization of debt issuance costs
1,089

 
203

 
284

 
172

 
174

 
833

 
172

 
375

 
301

 
194

 
1,042

Accretion of debt discounts
1,947

 
47

 
40

 
38

 
38

 
163

 
38

 
85

 
66

 
39

 
228

Loss on debt extinguishment and modification expense
20,445

 
776

 
758

 

 

 
1,534

 

 

 

 

 

Gain on sale of a business

 

 

 

 

 

 

 

 
(3,256
)
 

 
(3,256
)
Other (income) loss, net
(31
)
 
61

 
(2,112
)
 
28

 
29

 
(1,994
)
 
112

 
37

 
78

 
106

 
333

Total other loss, net
$
44,551

 
$
5,228

 
$
2,759

 
$
3,863

 
$
3,947

 
$
15,797

 
$
3,958

 
$
5,118

 
$
2,606

 
$
5,233

 
$
16,915

Income (loss) before income taxes
$
3,486

 
$
47,509

 
$
36,367

 
$
(14,555
)
 
$
(17,441
)
 
$
51,880

 
$
66,155

 
$
22,912

 
$
(74,717
)
 
$
(31,256
)
 
$
(16,906
)
Income tax (benefit) expense: (3) (5)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash
$
963

 
$
565

 
$
325

 
$
515

 
$
1,309

 
$
2,714

 
$
834

 
$
3,193

 
$
3,262

 
$
(3,725
)
 
$
3,564

Non-cash (6)
(26,853
)
 
1,398

 
582

 
(1,333
)
 
(3,050
)
 
(2,403
)
 
3,151

 
(11,317
)
 
(15,593
)
 
(44,859
)
 
(68,618
)
Total income tax (benefit) expense
$
(25,890
)
 
$
1,963

 
$
907

 
$
(818
)
 
$
(1,741
)
 
$
311

 
$
3,985

 
$
(8,124
)
 
$
(12,331
)
 
$
(48,584
)
 
$
(65,054
)
GAAP income (loss)
$
29,376

 
$
45,546

 
$
35,460

 
$
(13,737
)
 
$
(15,700
)
 
$
51,569

 
$
62,170

 
$
31,036

 
$
(62,386
)
 
$
17,328

 
$
48,148

GAAP impact of noncontrolling interests (7)
(2,337
)
 
(205
)
 
(222
)
 
(227
)
 
(281
)
 
(935
)
 

 

 

 

 

GAAP net income (loss) attributable to Blucora, Inc.
$
27,039

 
$
45,341

 
$
35,238

 
$
(13,964
)
 
$
(15,981
)
 
$
50,634

 
$
62,170

 
$
31,036

 
$
(62,386
)
 
$
17,328

 
$
48,148

GAAP net income (loss) per share attributable to Blucora, Inc. - diluted
$
0.57

 
$
0.93

 
$
0.71

 
$
(0.37
)
 
$
(0.38
)
 
$
0.90

 
$
1.25

 
$
0.62

 
$
(1.28
)
 
$
0.36

 
$
0.98

Non-GAAP net income (loss) (4)
$
69,148

 
$
58,232

 
$
47,726

 
$
(4,430
)
 
$
(7,492
)
 
$
94,036

 
$
77,194

 
$
41,382

 
$
(9,565
)
 
$
(4,813
)
 
$
104,198

Non-GAAP net income (loss) per share - diluted (4) (8)
$
1.46

 
$
1.20

 
$
0.97

 
$
(0.09
)
 
$
(0.16
)
 
$
1.90

 
$
1.56

 
$
0.83

 
$
(0.20
)
 
$
(0.10
)
 
$
2.11

Outstanding Shares
46,366

 
46,828

 
47,494

 
47,816

 
48,044

 
48,044

 
48,255

 
48,044

 
48,334

 
47,753

 
47,753

Basic weighted average shares outstanding
44,370

 
46,641

 
47,221

 
47,712

 
48,002

 
47,394

 
48,161

 
48,555

 
48,652

 
47,689

 
48,264

Diluted weighted average shares outstanding
47,211

 
48,665

 
49,434

 
47,712

 
48,002

 
49,381

 
49,542

 
49,822

 
48,652

 
48,344

 
49,282


Notes to Consolidated Financial Results on next page

2



Notes to Consolidated Financial Results


(1) 
The operations of 1st Global are included in the Company's operating results as part of the Wealth Management segment beginning May 6, 2019 when 1st Global was acquired.
(2) 
As a highly seasonal business, almost all of the Tax Preparation revenue is generated in the first four months of the calendar year.
(3) 
We do not allocate certain general and administrative costs (including personnel and overhead costs), stock-based compensation, acquisition and integration costs, depreciation, amortization of acquired intangible assets, restructuring, other income/loss, or income taxes to the reportable segments. General and administrative costs are included in "Unallocated corporate operating expenses."
(4) 
Non-GAAP measure. See Reconciliation of Non-GAAP Financial Measures on page 4 for additional information.
(5) 
On December 22, 2017, the Tax Cuts and Job Act was signed into law. This law, effective January 1, 2018, lowered the corporate income tax rate from 35% to 21%. As a result of that reduction, we re-valued our net deferred tax liabilities in 2017, which resulted in an additional income tax benefit of $21.4 million. For 2017, we recorded an income tax benefit of $25.9 million.
(6) 
Amounts represent the non-cash portion of income taxes. We exclude the non-cash portion of income taxes because of our ability to offset a substantial portion of our cash tax liabilities by using deferred tax assets, which consist primarily of U.S. federal net operating losses. The majority of these net operating losses will expire, if unutilized, between 2020 and 2024.
(7) 
GAAP income (loss) excludes the impact of noncontrolling interests associated with the HD Vest management rollover equity ownership of 4.48%. The impact of noncontrolling interests is recorded separately and after GAAP income (loss) through December 31, 2018, which was the final measurement date of those ownership interests.
(8) 
For periods in which non-GAAP net income is generated, non-GAAP net income per share is calculated using diluted weighted average shares outstanding. For periods in which non-GAAP net loss is generated, non-GAAP net loss per share is calculated using basic weighted average shares outstanding.  


3



Blucora Reconciliation of Non-GAAP Financial Measures (1) (2) 
(in thousands except per share amounts, rounding differences may exist)
2017
 
2018
 
2019
FY 12/31
 
1Q
 
2Q
 
3Q
 
4Q
 
FY 12/31
 
1Q
 
2Q
 
3Q
 
4Q
 
FY 12/31
Adjusted EBITDA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) attributable to Blucora, Inc. (1) (2)
$
27,039

 
$
45,341

 
$
35,238

 
$
(13,964
)
 
$
(15,981
)
 
$
50,634

 
$
62,170

 
$
31,036

 
$
(62,386
)
 
$
17,328

 
$
48,148

Stock-based compensation
11,653

 
2,955

 
3,730

 
2,874

 
3,694

 
13,253

 
2,443

 
4,082

 
4,639

 
5,136

 
16,300

Depreciation and amortization of acquired intangible assets
38,139

 
10,359

 
9,979

 
9,201

 
9,050

 
38,589

 
9,354

 
10,831

 
11,893

 
12,130

 
44,208

Restructuring
3,101

 
289

 
2

 

 
(3
)
 
288

 

 

 

 

 

Other loss, net
44,551

 
5,228

 
2,759

 
3,863

 
3,947

 
15,797

 
3,958

 
5,118

 
2,606

 
5,233

 
16,915

Net income attributable to noncontrolling interests
2,337

 
205

 
222

 
227

 
281

 
935

 

 

 

 

 

Acquisition and integration costs

 

 

 

 

 

 
1,797

 
9,183

 
6,759

 
8,024

 
25,763

Income tax benefit (expense)
(25,890
)
 
1,963

 
907

 
(818
)
 
(1,741
)
 
311

 
3,985

 
(8,124
)
 
(12,331
)
 
(48,584
)
 
(65,054
)
Impairment of intangible asset

 

 

 

 

 

 

 

 
50,900

 

 
50,900

Adjusted EBITDA
$
100,930

 
$
66,340

 
$
52,837

 
$
1,383

 
$
(753
)
 
$
119,807

 
$
83,707

 
$
52,126

 
$
2,080

 
$
(733
)
 
$
137,180

Non-GAAP Net Income (Loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) attributable to Blucora, Inc. (1) (2)
$
27,039

 
$
45,341

 
$
35,238

 
$
(13,964
)
 
$
(15,981
)
 
$
50,634

 
$
62,170

 
$
31,036

 
$
(62,386
)
 
$
17,328

 
$
48,148

Stock-based compensation
11,653

 
2,955

 
3,730

 
2,874

 
3,694

 
13,253

 
2,443

 
4,082

 
4,639

 
5,136

 
16,300

Amortization of acquired intangible assets
34,002

 
8,357

 
8,855

 
8,271

 
8,103

 
33,586

 
8,044

 
9,169

 
10,082

 
10,062

 
37,357

Impairment of intangible asset

 

 

 

 

 

 

 

 
50,900

 

 
50,900

Accretion and write-off of debt discount and debt issuance costs on previous debt
17,875

 

 

 

 

 

 

 

 

 

 

Gain on the sale of a business

 

 

 

 

 

 

 

 
(3,256
)
 

 
(3,256
)
Acquisition and integration costs

 

 

 

 

 

 
1,797

 
9,183

 
6,759

 
8,024

 
25,763

Restructuring
3,101

 
289

 
2

 

 
(3
)
 
288

 

 

 

 

 

Net income attributable to noncontrolling interests
2,337

 
205

 
222

 
227

 
281

 
935

 

 

 

 

 

Cash tax impact of adjustments to GAAP net income
(6
)
 
(313
)
 
(903
)
 
(505
)
 
(536
)
 
(2,257
)
 
(411
)
 
(771
)
 
(710
)
 
(504
)
 
(2,396
)
Non-cash income tax (benefit) expense
(26,853
)
 
1,398

 
582

 
(1,333
)
 
(3,050
)
 
(2,403
)
 
3,151

 
(11,317
)
 
(15,593
)
 
(44,859
)
 
(68,618
)
Non-GAAP net income (loss)
$
69,148

 
$
58,232

 
$
47,726

 
$
(4,430
)
 
$
(7,492
)
 
$
94,036

 
$
77,194

 
$
41,382

 
$
(9,565
)
 
$
(4,813
)
 
$
104,198

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP net income (loss) per share (3)
$
1.46

 
$
1.20

 
$
0.97

 
$
(0.09
)
 
$
(0.16
)
 
$
1.90

 
$
1.56

 
$
0.83

 
$
(0.20
)
 
$
(0.10
)
 
$
2.11

Weighted average shares outstanding (3)
47,211

 
48,665

 
49,434

 
47,712

 
48,002

 
49,381

 
49,542

 
49,822

 
48,652

 
47,689

 
49,282

 









Notes to Reconciliation of Non-GAAP Financial Measures on next page

4



Notes to Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures

(1) We define Adjusted EBITDA as net income (loss) attributable to Blucora, Inc., determined in accordance with GAAP, excluding the effects of stock-based compensation, depreciation and amortization of acquired intangible assets, restructuring, other loss, net, the impact of noncontrolling interests, acquisition and integration costs, income tax (benefit) expense, and the impairment of an intangible asset. Restructuring costs relate to the relocation of our corporate headquarters that were completed in 2018. Acquisition and integration costs relate to the acquisition of 1st Global. The impairment of an intangible asset relates to the impairment of the HD Vest trade name intangible asset.

We believe that Adjusted EBITDA provides meaningful supplemental information regarding our performance. We use this non-GAAP financial measure for internal management and compensation purposes, when publicly providing guidance on possible future results, and as a means to evaluate period-to-period comparisons. We believe that Adjusted EBITDA is a common measure used by investors and analysts to evaluate our performance, that it provides a more complete understanding of the results of operations and trends affecting our business when viewed together with GAAP results, and that management and investors benefit from referring to this non-GAAP financial measure. Items excluded from Adjusted EBITDA are significant and necessary components to the operations of our business and, therefore, Adjusted EBITDA should be considered as a supplement to, and not as a substitute for or superior to, GAAP net income (loss). Other companies may calculate Adjusted EBITDA differently and, therefore, our Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

We define non-GAAP net income as net income attributable to Blucora, Inc., determined in accordance with GAAP, excluding the effects of stock-based compensation, amortization of acquired intangible assets (including acquired technology), the impairment of an intangible asset, accretion and write-off of debt discount and debt issuance costs on previous debt, gain on the sale of a business, acquisition- and integration-related costs, restructuring costs, net income attributable to noncontrolling interests, the related cash tax impact of those adjustments, and non-cash income taxes. The write-off of debt discount and debt issuance costs on our formerly outstanding convertible senior notes and the closed TaxAct - HD Vest 2015 credit facility related to the debt refinancing that occurred in the second quarter of 2017. We exclude the non-cash portion of income taxes because of our ability to offset a substantial portion of our cash tax liabilities by using deferred tax assets, which primarily consist of U.S. federal net operating losses. The majority of these net operating losses will expire, if unutilized, between 2020 and 2024.

We believe that non-GAAP net income and non-GAAP net income per share provide meaningful supplemental information to management, investors, and analysts regarding our performance and the valuation of our business by excluding items in the statement of operations that we do not consider part of our ongoing operations or have not been, or are not expected to be, settled in cash. Additionally, we believe that non-GAAP net income and non-GAAP net income per share are common measures used by investors and analysts to evaluate our performance and the valuation of our business. Non-GAAP net income and non-GAAP net income per share should be evaluated in light of our financial results prepared in accordance with GAAP and should be considered as a supplement to, and not as a substitute for or superior to, GAAP net income and GAAP net income per share. Other companies may calculate these non-GAAP measures differently, and, therefore, our non-GAAP net income and non-GAAP net income per share may not be comparable to similarly titled measures of other companies.

(2) As presented in the Blucora Consolidated Financial Results (unaudited) on page 2.

(3) For periods in which non-GAAP net income is generated, non-GAAP net income per share is calculated using diluted weighted average shares outstanding. For periods in which non-GAAP net loss is generated, non-GAAP net loss per share is calculated using basic weighted average shares outstanding.







5



Blucora Net Leverage Ratio
 
2017
 
2018
 
2019
 
(in thousands except ratio, rounding differences may exist)
4Q
 
1Q
 
2Q
 
3Q
 
4Q
 
1Q
 
2Q
 
3Q
 
4Q
 
CASH:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
59,965

 
$
77,107

 
$
89,840

 
$
88,274

 
$
84,524

 
$
149,762

 
$
109,606

 
$
97,466

 
$
80,820

 
DEBT:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior secured credit facility
$
345,000

 
$
305,000

 
$
265,000

 
$
265,000

 
$
265,000

 
$
265,000

 
$
390,000

 
$
390,000

 
$
399,687

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET DEBT (1) (2)
$
(285,035
)
 
$
(227,893
)
 
$
(175,160
)
 
$
(176,726
)
 
$
(180,476
)
 
$
(115,238
)
 
$
(280,394
)
 
$
(292,534
)
 
$
(318,867
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Last twelve months:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SEGMENT INCOME:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Wealth Management
$
50,916

 
$
52,138

 
$
52,686

 
$
53,152

 
$
53,053

 
$
51,518

 
$
55,543

 
$
63,283

 
$
68,292

 
Tax Preparation
72,921

 
78,594

 
86,200

 
85,502

 
87,249

 
107,715

 
104,962

 
99,823

 
96,249

 
 
123,837

 
130,732

 
138,886

 
138,654

 
140,302

 
159,233

 
160,505

 
163,106

 
164,541

 
Unallocated corporate operating expenses
(22,907
)
 
(21,675
)
 
(19,450
)
 
(19,435
)
 
(20,495
)
 
(22,059
)
 
(24,042
)
 
(25,946
)
 
(27,361
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ADJUSTED EBITDA (1)
$
100,930

 
$
109,057

 
$
119,436

 
$
119,219

 
$
119,807

 
$
137,174

 
$
136,463

 
$
137,160

 
$
137,180

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LEVERAGE RATIO (1) (3)
2.8

x
2.1

x
1.5

x
1.5

x
1.5

x
0.8

x
2.1

x
2.1

x
2.3

x
(1)
Non-GAAP measure using Adjusted EBITDA for the last twelve months.
(2)
We define net debt as cash and cash equivalents less the outstanding principal of debt. Management believes that the presentation of this non-GAAP financial measure provides useful information to investors because it is an important liquidity measurement that reflects our ability to service debt.
(3)
Net debt leverage ratio is net debt divided by Adjusted EBITDA. Adjusted EBITDA is reconciled to the nearest non-GAAP measure above.

6



Blucora Reconciliation of Operating Free Cash Flow (1)
 
2017
 
2018
 
2019
(in thousands, rounding differences may exist)
FY 12/31
 
1Q
 
2Q
 
3Q
 
4Q
 
FY 12/31
 
1Q
 
2Q
 
3Q
 
4Q
 
FY 12/31
Net cash provided (used) by operating activities
$
72,846

 
$
57,450

 
$
49,107

 
$
(974
)
 
$
(35
)
 
$
105,548

 
$
70,236

 
$
26,576

 
$
(565
)
 
$
(3,443
)
 
$
92,804

Purchases of property and equipment
(5,039
)
 
(940
)
 
(1,662
)
 
(2,738
)
 
(2,293
)
 
(7,633
)
 
(1,243
)
 
(1,695
)
 
(3,949
)
 
(3,614
)
 
(10,501
)
Operating free cash flow
$
67,807

 
$
56,510

 
$
47,445

 
$
(3,712
)
 
$
(2,328
)
 
$
97,915

 
$
68,993

 
$
24,881

 
$
(4,514
)
 
$
(7,057
)
 
$
82,303

(1) 
We define operating free cash flow, which is a Non-GAAP measure, as net cash provided (used) by operating activities less purchases of property and equipment. We believe operating free cash flow is an important liquidity measure that reflects the cash generated by the continuing businesses, after the purchases of property and equipment, that can then be used for, among other things, strategic acquisitions and investments in the business, stock repurchases, and funding ongoing operations.

7


Blucora Operating Metrics - Wealth Management
 
2017
 
2018
 
2019
(in thousands except %s, rounding differences may exist)
FY 12/31
 
1Q
 
2Q
 
3Q
 
4Q
 
FY 12/31
 
1Q
 
2Q
 
3Q
 
4Q
 
FY 12/31
Segment revenue
$
348,620

 
$
92,082

 
$
92,015

 
$
91,887

 
$
97,190

 
$
373,174

 
$
89,532

 
$
127,831

 
$
145,428

 
$
145,188

 
$
507,979

Segment net revenue (1)
$
113,417

 
$
29,256

 
$
29,822

 
$
29,994

 
$
31,745

 
$
120,817

 
$
28,672

 
$
41,248

 
$
44,728

 
$
45,328

 
$
159,976

Segment income (2)
$
50,916

 
$
13,075

 
$
12,954

 
$
12,891

 
$
14,133

 
$
53,053

 
$
11,540

 
$
16,979

 
$
20,631

 
$
19,142

 
$
68,292

Segment income % of revenue
15
%
 
14
%
 
14
%
 
14
%
 
15
%
 
14
%
 
13
%
 
13
%
 
14
%
 
13
%
 
13
%
Segment income % of net revenue
45
%
 
45
%
 
43
%
 
43
%
 
45
%
 
44
%
 
40
%
 
41
%
 
46
%
 
42
%
 
43
%
(in thousands except %s, rounding differences may exist)
2017
 
2018
 
2019
 
Sources of Revenue
Primary Drivers
FY 12/31
 
1Q
 
2Q
 
3Q
 
4Q
 
FY 12/31
 
1Q
 
2Q
 
3Q
 
4Q
 
FY 12/31
Advisor-driven

Commission
- Transactions
- Asset levels
- Product mix
$
160,241

 
$
42,870

 
$
40,384

 
$
41,015

 
$
39,932

 
$
164,201

 
$
37,160

 
$
48,068

 
$
52,623

 
$
53,199

 
$
191,050

Advisory
- Advisory asset levels
145,694

 
39,301

 
40,058

 
41,443

 
43,551

 
164,353

 
39,757

 
61,410

 
75,579

 
75,621

 
252,367

Other revenue
Asset-based
- Cash balances
- Interest rates
- Number of accounts
- Client asset levels
26,297

 
7,172

 
7,306

 
6,979

 
9,999

 
31,456

 
9,693

 
13,219

 
13,618

 
11,652

 
48,182

Transaction and fee
- Account activity
- Number of clients
- Number of advisors
- Number of accounts
16,388

 
2,739

 
4,267

 
2,450

 
3,708

 
13,164

 
2,922

 
5,134

 
3,608

 
4,716

 
16,380

 
Total revenue
$
348,620

 
$
92,082

 
$
92,015

 
$
91,887

 
$
97,190

 
$
373,174

 
$
89,532

 
$
127,831

 
$
145,428

 
$
145,188

 
$
507,979

 
Total recurring revenue (3)
$
277,546

 
$
72,962

 
$
75,369

 
$
74,228

 
$
80,558

 
$
303,117

 
$
73,241

 
$
106,557

 
$
121,304

 
$
121,026

 
$
422,128

 
Recurring revenue rate (3)
79.6
%
 
79.2
%
 
81.9
%
 
80.8
%
 
82.9
%
 
81.2
%
 
81.8
%
 
83.4
%
 
83.4
%
 
83.4
%
 
83.1
%
(in thousands except %s and as otherwise indicated, rounding differences may exist)
2017
 
2018
 
2019
FY 12/31
 
1Q
 
2Q
 
3Q
 
4Q
 
FY 12/31
 
1Q
 
2Q
 
3Q
 
4Q
 
FY 12/31
Total Client Assets
$
44,178,710

 
$
44,383,024

 
$
45,016,993

 
$
46,413,409

 
$
42,249,055

 
$
42,249,055

 
$
46,164,603

 
$
67,602,006

 
$
67,682,510

 
$
70,644,385

 
$
70,644,385

Brokerage Assets
$
31,648,545

 
$
31,665,899

 
$
32,069,800

 
$
32,897,081

 
$
29,693,650

 
$
29,693,650

 
$
32,176,414

 
$
41,335,972

 
$
41,358,346

 
$
43,015,221

 
$
43,015,221

Advisory Assets
$
12,530,165

 
$
12,717,125

 
$
12,947,193

 
$
13,516,328

 
$
12,555,405

 
$
12,555,405

 
$
13,988,189

 
$
26,266,034

 
$
26,324,164

 
$
27,629,164

 
$
27,629,164

% of Total Client Assets
28.4
%
 
28.7
%
 
28.8
%
 
29.1
%
 
29.7
%
 
29.7
%
 
30.3
%
 
38.9
%
 
38.9
%
 
39.1
%
 
39.1
%
Number of Advisors (in ones)
3,999

 
3,920

 
3,709

 
3,687

 
3,593

 
3,593

 
3,553

 
4,225

 
4,119

 
3,984

 
3,984

Advisor-driven revenue per adviser (4)
$
76.5

 
$
21.0

 
$
21.7

 
$
22.4

 
$
23.2

 
$
91.4

 
$
21.6

 
$
25.9

 
$
31.1

 
$
32.3

 
$
111.3

(1) 
Amount represents segment revenue less advisor commission payout.
(2) 
Excludes expenses associated with non-recurring projects.
(3) 
Recurring revenue consists of trailing commissions, advisory fees, fees from cash sweep programs, and certain transaction and fee revenue.
(4) 
Full-year advisor-driven revenue per advisor is based upon a full year of advisor-driven revenue.

8



Blucora Operating Metrics - Tax Preparation
(in thousands except %s and as otherwise indicated, rounding differences may exist)
Years ended December 31,
 
U.S. tax seasons ended
Consumers
2019
 
2018
 
% change
 
April 16, 2019
 
April 19, 2018
 
% change
E-files
3,239

 
3,896

 
(17
)%
 
3,115

 
3,772

 
(17
)%
Preparers
 
 
 
 
 
 
 
 
 
 
 
E-files
2,011

 
1,916

 
5
 %
 
1,833

 
1,763

 
4
 %
Units sold (in ones)
20,746

 
20,719

 
 %
 
20,502

 
20,588

 
 %
E-files per unit sold (in ones)
96.9

 
92.5

 
5
 %
 
89.4

 
85.6

 
4
 %









9