BCOR
$21.97
Blucora
($.50)
(2.23%)
Earnings Details
Quarter December 2019
Wednesday, February 19, 2020 6:30:00 AM
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Summary

Blucora Beats

Blucora (BCOR) reported a Quarter December 2019 loss of $0.08 per share on revenue of $149.4 million. The consensus estimate was a loss of $0.22 per share on revenue of $150.4 million. The Earnings Whisper number was for a loss of $0.18 per share. Revenue grew 47.6% on a year-over-year basis.

The company said it expects first quarter earnings of $1.52 to $1.64 per share on revenue of $271.0 million to $281.5 million. The current consensus earnings estimate is $1.61 per share on revenue of $286.9 million for the quarter ending March 31, 2020.

Blucora Inc is engaged in operating Internet business. It operates an internet Search & Content business, an online Tax Preparation business, and an E-Commerce business providing search services to users, online tax preparation service & sales services.

Results
Reported Earnings
($0.08)
Earnings Whisper
($0.18)
Consensus Estimate
($0.22)
Reported Revenue
$149.4 Mil
Revenue Estimate
$150.4 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Blucora Reports Fourth Quarter and Full Year 2019 Results

IRVING, Texas, Feb. 19, 2020 (GLOBE NEWSWIRE) -- Blucora, Inc. (NASDAQ: BCOR), a leading provider of tax-smart financial solutions that empower people’s goals, today announced financial results for the fourth quarter and full year ended December 31, 2019.

2019 Highlights and Recent Developments

  • Increased total revenue by 28% year-over-year (y/y), including addition of 1st Global since May 6
  • Achieved record advisory net flows at Avantax of approximately $1 billion
  • Recorded 22nd consecutive year of revenue growth at TaxAct, growing 12% year-over-year
  • Completed $28 million of a $100 million share repurchase program, supported by strong cash flow generation
  • Completed acquisition of 1st Global, adding significant scale, complementary capabilities and high recurring revenue
  • Achieved $6.5 million in synergies related to 1st Global in 2019, more than double original estimate

“Blucora’s fourth quarter results cap a year of strong financial performance, strengthening our platform, and investing for future growth,” said Chris Walters, Blucora’s President and Chief Executive Officer. “While we have made good progress on many fronts, I’m even more excited about the growth opportunities we see ahead.”

Summary Financial Performance: Q4 and Full Year 2019
($ in millions except per share amounts)

 Q4 Q4   Full Year Full Year  
 2019 2018 Change 2019 2018 Change
Revenue           
Wealth Management$145.2  $97.2  49% $508.0  $373.2  36%
Tax Preparation$4.2  $4.1  2% $210.0  $187.3  12%
Total Revenue$149.4  $101.3  47% $717.9  $560.5  28%
Segment Income (Loss):           
Wealth Management$19.1  $14.1  35% $68.3  $53.1  29%
Tax Preparation$(12.3) $(8.7) (41)% $96.2  $87.2  10%
Total Segment Income$6.8  $5.4  26% $164.5  $140.3  17%
Unallocated Corporate Operating Expenses$7.6  $6.1  25% $27.4  $20.5  34%
GAAP:           
Operating Income (Loss)$(26.0) $(13.5) (93)% $  $67.7  (100)%
Net Income (Loss) Attributable to Blucora. Inc.$17.3  $(16.0) 208% $48.1  $50.6  (5)%
Diluted Net Income (Loss) Per Share Attributable to Blucora. Inc. (1)$0.36  $(0.38) 195% $0.98  $0.90  9%
Non-GAAP: (2)           
Adjusted EBITDA$(0.7) $(0.8) 13% $137.2  $119.8  15%
Net Income (Loss)$(4.8) $(7.5) 36% $104.2  $94.0  11%
Diluted Net Income (Loss) per Share$(0.10) $(0.16) 38% $2.11  $1.90  11%

(1) Includes noncontrolling interest redemption impacts of $(0.05) and (0.13) for the fourth quarter and full year ended December 31, 2018, respectively.
(2) See reconciliations of all non-GAAP to GAAP measures presented in this release in the tables below.

2019 Results vs. Prior Guidance

$ in millionsPrior GuidanceMidpointActualDifference at
Midpoint
Wealth Management Revenue$505.0 - $510.0$507.5$508.0$0.5
TaxAct Revenue$209.5 - $210.5$210.0$210.0$—
Total Revenue$714.5 - $720.5$717.5$717.9$0.4
Wealth Management Segment Income$67.0 - $69.5$68.3$68.3$—
TaxAct Segment Income$93.0 - $94.5$93.8$96.2$2.4
Corporate Unallocated Operating Expenses$28.5 - $29.5$29.0$27.4$1.6
Adjusted EBITDA$130.5 - $135.5$133.0$137.2$4.2

Tax Season Update

“We’re excited to have a significantly improved experience for TaxAct customers this tax season,” Walters continued. “Customers filing with TaxAct this year will experience a much easier and more enjoyable tax filing process, with several benefits to make the experience even more rewarding. A few highlights for this season include:

  • My Tax Plan: a new feature which creates a custom plan for each user to save more on taxes next year. It is personalized to the customer's tax situation, provides specific savings amounts, and includes a downloadable "checklist" of actions to save. We believe this is a significant and differentiated benefit to customers;
  • Pro Tips: a visually enticing way to reveal lesser-known tax advantages, customized for the individual filer, that help customers get a bigger refund this year and for years to come.

We also brought back some more of our most popular features, like our $100,000 accuracy guarantee, and an enhanced personalized Deduction Maximizer, which checks if customers have included every available deduction.”

“Based on early tax season data, we continue to expect first-half 2020 tax preparation revenue growth of approximately 3%-5% versus the comparable period last year, adjusted for the removal of SimpleTax, with segment margin in the range of 56.7%-57.7%.”

First Quarter Outlook

For the first quarter of 2020, the Company expects revenues to be between $271.0 million and $281.5 million, GAAP net income attributable to Blucora, Inc. to be between $31.5 million and $34.5 million, or $0.64 to $0.70 per diluted share, Adjusted EBITDA to be between $85.0 million and $91.0 million, and Non-GAAP net income to be between $74.5 million and $80.5 million, or $1.52 to $1.64 per diluted share.

Conference Call and Webcast

A conference call and live webcast will be held today at 8:30 a.m. Eastern Time during which the Company will further discuss fourth quarter and full year results, its outlook for the first quarter, its tax season update, and other business matters. We will also provide the prepared remarks for the conference call along with supplemental financial information to our results on the Investor Relations section of the Blucora corporate website at http://www.blucora.com prior to the call. The supplemental financial information has also been filed with the SEC on Form 8-K. A replay of the call will be available on our website.

About Blucora®

Blucora, Inc. (NASDAQ: BCOR) is on the forefront of financial technology, pioneering tax-smart financial solutions that empower people’s goals. Blucora operates in two segments including wealth management, through its Avantax Wealth Management business (formerly operating under the HD Vest and 1st Global brands), the No. 1 tax-focused broker-dealer, with $71 billion in total client assets as of December 31, 2019, and tax preparation, through its TaxAct business, a market leader in tax preparation software with approximately 3 million consumer and professional users. With integrated tax and wealth management, Blucora is uniquely positioned to provide better long-term outcomes for customers with holistic, tax-advantaged solutions. For more information on Blucora, visit www.blucora.com.

Source: Blucora

Blucora Contact:
Bill Michalek (972) 870-6463
VP, Investor Relations

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. When used in this release, terms such as “believes,” “estimates,” “should,” “could,” “would,” “plans,” “expects,” “intends,” “anticipates,” “may,” “forecasts,” “projects” and similar expressions and variations as they relate to the Company or its management are intended to identify forward-looking statements. Actual results may differ significantly from management’s expectations due to various risks and uncertainties including, but not limited to: our ability to effectively implement our future business plans and growth strategy; our ability to effectively compete within our industry; our ability to attract and retain qualified employees and leadership, advisors, clients and customers; our ability to execute upon the contemplated strategic and performance initiatives and to successfully integrate acquired businesses or assets and realize the anticipated benefits thereof; the availability of financing and our ability to meet our current and future debt service obligations and comply with our debt covenants; our ability to generate strong investment performance for our customers and the impact of the financial markets on our customers’ portfolios; political and economic conditions and events that directly or indirectly impact the wealth management and tax preparation industries; our ability to successfully make technology enhancements and introduce new and improve on existing products and services; our expectations concerning the revenues we generate from fees associated with the financial products that we distribute; our ability to manage leadership and employee transitions; risks related to goodwill and other intangible asset impairment; our ability to comply with regulations (or interpretations thereof) applicable to the wealth management and tax preparation industries, including increased costs associated with or reductions in revenue resulting from new or changing regulations or interpretations of existing regulations; risks associated with our business being subject to enhanced regulatory scrutiny; our ability to comply with laws and regulations regarding privacy and protection of data; cybersecurity risks; our ability to develop and maintain our relationships with third party partners; the seasonality of our business; legal proceedings risks, including litigation and regulatory proceedings; our assessments and estimates that determine our effective tax rate; the impact of new or changing tax legislation; our ability to develop, establish and maintain strong brands; and our ability to protect our intellectual property. A more detailed description of these and certain other factors that could affect actual results is included in the Company’s filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date hereof, except as may be required by law. In addition, the Company has not filed its Form 10-K for the year ended December 31, 2019. As a result, all financial results described in this earnings release should be considered preliminary, and are subject to change to reflect the completion of our audit and any necessary adjustments or changes in accounting estimates that are identified prior to the time the Company files the Form 10-K.


Blucora, Inc.
Preliminary Condensed Consolidated Statements of Operations
(Unaudited) (Amounts in thousands, except per share data)

 Three Months Ended December 31, Years Ended December 31,
 2019 2018 2019 2018
Revenue:       
Wealth management services revenue$145,188  $97,190  $507,979  $373,174 
Tax preparation services revenue4,233  4,068  209,966  187,282 
Total revenue149,421  101,258  717,945  560,456 
Operating expenses:       
Cost of revenue:       
Wealth management services cost of revenue101,200  66,054  352,081  253,580 
Tax preparation services cost of revenue1,708  1,858  10,691  10,040 
Amortization of acquired technology      99 
Total cost of revenue (1)102,908  67,912  362,772  263,719 
Engineering and technology (1)8,608  5,107  30,931  19,332 
Sales and marketing (1)21,401  16,642  126,205  111,361 
General and administrative (1)22,808  16,229  78,529  60,124 
Acquisition and integration8,024    25,763   
Depreciation1,633  762  5,479  4,468 
Amortization of other acquired intangible assets10,062  8,103  37,357  33,487 
Impairment of intangible asset    50,900   
Restructuring  (3)   288 
Total operating expenses175,444  114,752  717,936  492,779 
Operating income (loss)(26,023) (13,494) 9  67,677 
Other loss, net (2)(5,233) (3,947) (16,915) (15,797)
Income (loss) before income taxes(31,256) (17,441) (16,906) 51,880 
Income tax benefit (expense)48,584  1,741  65,054  (311)
Net income (loss)17,328  (15,700) 48,148  51,569 
Net income attributable to noncontrolling interests  (281)   (935)
Net income (loss) attributable to Blucora, Inc.$17,328  $(15,981) $48,148  $50,634 
Net income (loss) per share attributable to Blucora, Inc.:       
Basic$0.36  $(0.38) $1.00  $0.94 
Diluted$0.36  $(0.38) $0.98  $0.90 
Weighted average shares outstanding:       
Basic47,689  48,002  48,264  47,394 
Diluted48,344  48,002  49,282  49,381 

(1) Stock-based compensation expense was allocated among the following captions (in thousands):

 Three Months Ended December 31, Years Ended December 31,
 2019 2018 2019 2018
Cost of revenue$1,341  $527  $4,082  $1,467 
Engineering and technology193  176  715  766 
Sales and marketing257  589  346  2,424 
General and administrative3,345  2,402  11,157  8,596 
Total stock-based compensation expense$5,136  $3,694  $16,300  $13,253 

(2) Other loss, net consisted of the following (in thousands):

 Three Months Ended December 31, Years Ended December 31,
 2019 2018 2019 2018
Interest expense$5,002  $3,838  $19,017  $15,610 
Interest income(108) (132) (449) (349)
Amortization of debt issuance costs194  174  1,042  833 
Accretion of debt discounts39  38  228  163 
Loss on debt extinguishment      1,534 
Gain on sale of a business    (3,256)  
Other106  29  333  (1,994)
Other loss, net$5,233  $3,947  $16,915  $15,797 


Blucora, Inc.
Preliminary Condensed Consolidated Balance Sheets
(Unaudited) (Amounts in thousands)

 December 31,
 2019 2018
ASSETS   
Current assets:   
Cash and cash equivalents$80,820  $84,524 
Cash segregated under federal or other regulations5,630  842 
Accounts receivable, net of allowance16,266  15,721 
Commissions receivable21,176  15,562 
Other receivables2,902  7,408 
Prepaid expenses and other current assets, net12,349  7,755 
Total current assets139,143  131,812 
Long-term assets:   
Property and equipment, net18,706  12,389 
Right-of-use assets, net10,151   
Goodwill, net662,375  548,685 
Other intangible assets, net290,211  294,603 
Deferred tax asset, net9,997   
Other long-term assets6,989  10,236 
Total long-term assets998,429  865,913 
Total assets$1,137,572  $997,725 
LIABILITIES AND STOCKHOLDERS’ EQUITY   
Current liabilities:   
Accounts payable$10,969  $3,798 
Commissions and advisory fees payable19,905  15,199 
Accrued expenses and other current liabilities36,144  18,980 
Deferred revenue—current12,014  10,257 
Lease liabilities—current3,272  46 
Current portion of long-term debt, net11,228   
Total current liabilities93,532  48,280 
Long-term liabilities:   
Long-term debt, net381,485  260,390 
Deferred tax liability, net  40,394 
Deferred revenue—long-term7,172  8,581 
Lease liabilities—long-term5,916  100 
Other long-term liabilities5,952  7,440 
Total long-term liabilities400,525  316,905 
Total liabilities494,057  365,185 
    
Redeemable noncontrolling interests  24,945 
    
Stockholders’ equity:   
Common stock, par $0.0001—900,000 authorized shares; 49,059 shares issued and 47,753 shares outstanding at December 31, 2019; 48,044 shares issued and outstanding at December 31, 20185  5 
Additional paid-in capital1,586,972  1,569,725 
Accumulated deficit(914,791) (961,689)
Accumulated other comprehensive loss(272) (446)
Treasury stock, at cost—1,306 shares at December 31, 2019(28,399)  
Total stockholders’ equity643,515  607,595 
Total liabilities and stockholders’ equity$1,137,572  $997,725 


Blucora, Inc.
Preliminary Condensed Consolidated Statements of Cash Flows
(Unaudited) (Amounts in thousands)

 Years Ended December 31,
 2019 2018
Operating activities:   
Net income$48,148  $51,569 
Adjustments to reconcile net income to net cash from operating activities:   
Stock-based compensation16,300  13,253 
Depreciation and amortization of acquired intangible assets44,208  38,589 
Impairment of intangible asset50,900   
Reduction of right-of-use assets4,425   
Deferred income taxes(67,549) (3,039)
Amortization of premium on investments, net, and debt issuance costs1,042  833 
Accretion of debt discounts228  163 
Loss on debt extinguishment and modification expense  1,534 
Gain on sale of a business(3,256)  
Other734  73 
Cash provided (used) by changes in operating assets and liabilities:   
Accounts receivable871  (4,286)
Commissions receivable(471) 1,260 
Other receivables4,506  (3,851)
Prepaid expenses and other current assets10,537  (815)
Other long-term assets3,377  3,450 
Accounts payable29  (615)
Commissions and advisory fees payable432  (2,614)
Lease liabilities(7,335)  
Deferred revenue(17,367) 9,930 
Accrued expenses and other current and long-term liabilities3,045  114 
Net cash provided by operating activities92,804  105,548 
Investing activities:   
Business acquisition, net of cash acquired(166,560)  
Purchases of property and equipment(10,501) (7,633)
Proceeds from sale of a business, net of cash7,467   
Net cash used by investing activities(169,594) (7,633)
Financing activities:   
Proceeds from credit facilities, net of debt issuance costs and debt discount131,489   
Payments on credit facilities(313) (80,000)
Stock repurchases(28,399)  
Payment of redeemable noncontrolling interests(24,945)  
Proceeds from stock option exercises4,387  12,773 
Proceeds from issuance of stock through employee stock purchase plan2,212  2,100 
Tax payments from shares withheld for equity awards(5,652) (8,362)
Contingent consideration payments for business acquisition(943) (1,315)
Net cash provided (used) by financing activities77,836  (74,804)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash38  (56)
Net increase in cash, cash equivalents, and restricted cash1,084  23,055 
Cash, cash equivalents, and restricted cash, beginning of period85,366  62,311 
Cash, cash equivalents, and restricted cash, end of period$86,450  $85,366 


Blucora, Inc.
Preliminary Segment Information
(Unaudited) (Amounts in thousands)

 Three Months Ended December 31, Years Ended December 31,
 2019 2018 2019 2018
Revenue:       
Wealth Management (1)$145,188  $97,190  $507,979  $373,174 
Tax Preparation (1)4,233  4,068  209,966  187,282 
Total revenue149,421  101,258  717,945  560,456 
Operating income (loss):       
Wealth Management19,142  14,133  68,292  53,053 
Tax Preparation(12,316) (8,742) 96,249  87,249 
Corporate-level activity (2)(32,849) (18,885) (164,532) (72,625)
Total operating income (loss)(26,023) (13,494) 9  67,677 
Other loss, net(5,233) (3,947) (16,915) (15,797)
Income tax benefit (expense)48,584  1,741  65,054  (311)
Net income (loss)$17,328  $(15,700) $48,148  $51,569 

(1) Revenues by major category within each segment are presented below (in thousands):

 Three Months Ended December 31, Years Ended December 31,
 2019 2018 2019 2018
Wealth Management:       
Commission$53,199  $39,932  $191,050  $164,201 
Advisory75,621  43,551  252,367  164,353 
Asset-based11,652  9,999  48,182  31,456 
Transaction and fee4,716  3,708  16,380  13,164 
Total Wealth Management revenue$145,188  $97,190  $507,979  $373,174 
Tax Preparation:       
Consumer$4,096  $3,912  $195,004  $172,207 
Professional137  156  14,962  15,075 
Total Tax Preparation revenue$4,233  $4,068  $209,966  $187,282 

(2) Corporate-level activity included the following (in thousands):

 Three Months Ended December 31, Years Ended December 31,
 2019 2018 2019 2018
Operating expenses$7,559  $6,144  $27,361  $20,495 
Stock-based compensation5,136  3,694  16,300  13,253 
Acquisition and integration costs8,024    25,763   
Depreciation2,068  947  6,851  5,003 
Amortization of acquired intangible assets10,062  8,103  37,357  33,586 
Impairment of intangible asset    50,900   
Restructuring  (3)   288 
Total corporate-level activity$32,849  $18,885  $164,532  $72,625 


Blucora, Inc.
Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures (1)

Preliminary Adjusted EBITDA Reconciliation (1)
(Unaudited) (Amounts in thousands)

 Three Months Ended December 31, Years Ended December 31,
 2019 2018 2019 2018
Net income attributable to Blucora, Inc. (2)$17,328  $(15,981) $48,148  $50,634 
Stock-based compensation5,136  3,694  16,300  13,253 
Depreciation and amortization of acquired intangible assets12,130  9,050  44,208  38,589 
Restructuring  (3)   288 
Other loss, net (3)5,233  3,947  16,915  15,797 
Net income attributable to noncontrolling interests  281    935 
Acquisition and integration costs8,024    25,763   
Income tax (benefit) expense(48,584) (1,741) (65,054) 311 
Impairment of intangible asset    50,900   
Adjusted EBITDA$(733) $(753) $137,180  $119,807 


Preliminary Non-GAAP Net Income (Loss) and Non-GAAP Income (Loss) Per Share Reconciliation (1)
(Unaudited) (Amounts in thousands, except per share amounts)

 Three Months Ended December 31, Years Ended December 31,
 2019 2018 2019 2018
Net income (loss) attributable to Blucora, Inc. (2)$17,328  $(15,981) $48,148  $50,634 
Stock-based compensation5,136  3,694  16,300  13,253 
Amortization of acquired intangible assets10,062  8,103  37,357  33,586 
Impairment of intangible asset    50,900   
Gain on sale of a business    (3,256)  
Acquisition and integration costs8,024    25,763   
Restructuring  (3)   288 
Net income attributable to noncontrolling interests  281    935 
Cash tax impact of adjustments to GAAP net income(504) (536) (2,396) (2,257)
Non-cash income tax benefit(44,859) (3,050) (68,618) (2,403)
Non-GAAP net income (loss)$(4,813) $(7,492) $104,198  $94,036 
Per diluted share:       
Net income (loss) attributable to Blucora, Inc. (2)$0.36  $(0.38) $0.98  $0.90 
Stock-based compensation0.11  0.08  0.33  0.27 
Amortization of acquired intangible assets0.21  0.15  0.76  0.68 
Impairment of intangible asset    1.03   
Gain on sale of a business    (0.07)  
Acquisition and integration costs0.17    0.52   
Restructuring      0.01 
Net income attributable to noncontrolling interests  0.06    0.14 
Cash tax impact of adjustments to GAAP net income(0.01) (0.01) (0.05) (0.05)
Non-cash income tax benefit(0.94) (0.06) (1.39) (0.05)
Non-GAAP net income (loss) per share$(0.10) $(0.16) $2.11  $1.90 
Weighted average shares outstanding used in calculating Non-GAAP net income per share47,689  48,002  49,282  49,381 


Preliminary Adjusted EBITDA Reconciliation for Forward-Looking Guidance (1)
(Amounts in thousands)

 Ranges for the three months ending
 March 31, 2020
 Low High
Net income attributable to Blucora, Inc.$31,500  $34,500 
Stock-based compensation3,200  3,000 
Depreciation and amortization of acquired intangible assets10,600  10,200 
Acquisition, integration, relocation, and executive transition costs18,200  17,800 
Other loss, net (3)5,600  5,400 
Income tax expense15,900  20,100 
Adjusted EBITDA$85,000  $91,000 


Preliminary Non-GAAP Income Reconciliation for Forward-Looking Guidance (1)
(Amounts in thousands)

 Ranges for the three months ending
 March 31, 2020
 Low High
Net income attributable to Blucora, Inc.$31,500  $34,500 
Stock-based compensation3,200  3,000 
Amortization of acquired intangible assets7,900  7,800 
Acquisition, integration, relocation, and executive transition costs18,200  17,800 
Cash tax impact of adjustments to net income (loss)(500) (500)
Non-cash income tax expense14,200  17,900 
Non-GAAP income$74,500  $80,500 
Per diluted share:   
Net income attributable to Blucora, Inc.$0.64  $0.70 
Stock-based compensation0.07  0.06 
Amortization of acquired intangible assets0.16  0.16 
Acquisition, integration, relocation, and executive transition costs0.37  0.36 
Cash tax impact of adjustments to net income (loss)(0.01) (0.01)
Non-cash income tax expense0.29  0.37 
Non-GAAP net income per share$1.52  $1.64 
    
Weighted average shares outstanding used in calculating Non-GAAP net income per share49,154  49,004 


Preliminary Adjusted EBITDA Reconciliation for Prior Guidance (1)
(Amounts in thousands)

 Ranges for the year ending
 December 31, 2019
 Low High
Net income attributable to Blucora, Inc.$(5,400) $(400)
Stock-based compensation17,000  16,500 
Depreciation and amortization of acquired intangible assets45,500  45,000 
Other loss, net (3)19,000  18,000 
Acquisition and integration costs24,000  23,500 
Impairment of intangible asset51,000  51,000 
Income tax benefit(20,600) (18,100)
Adjusted EBITDA$130,500  $135,500 


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, net income attributable to 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 (loss) as net income (loss) attributable to Blucora, Inc., determined in accordance with GAAP, excluding the effects of stock-based compensation, amortization of acquired intangible assets, the impairment of an intangible asset (described further under Adjusted EBITDA above), gain on the sale of a business, acquisition and integration costs (described further under Adjusted EBITDA above), restructuring costs (described further under Adjusted EBITDA above), net income attributable to noncontrolling interests, the related cash tax impact of those adjustments, and non-cash income taxes. The gain on the sale of a business refers to the gain recognized on the sale of SimpleTax in 2019. 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. The aforementioned items are only included in the calculation of non-GAAP net income (loss) in the periods they occurred.
  
 We believe that non-GAAP net income (loss) and non-GAAP net income (loss) 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 (loss) and non-GAAP net income (loss) per share are common measures used by investors and analysts to evaluate our performance and the valuation of our business. Non-GAAP net income (loss) and non-GAAP net income (loss) 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 (loss) and net income per share. Other companies may calculate non-GAAP net income (loss) and non-GAAP net income (loss) per share differently, and, therefore, our non-GAAP net income (loss) and non-GAAP net income (loss) per share may not be comparable to similarly titled measures of other companies.
  
(2)As presented in the Preliminary Condensed Consolidated Statements of Operations (unaudited).
  
(3)Other loss, net, primarily includes items such as interest expense, interest income, amortization of debt issuance costs, accretion of debt discounts, loss on debt extinguishment, and gain on the sale of a business.
  

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Source: Blucora, Inc.