bcor-20220216

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

February 16, 2022

Date of Report

(Date of earliest event reported)

BLUCORA, INC.

(Exact name of registrant as specified in its charter)


Delaware	000-25131	91-1718107
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

3200 Olympus Blvd, Suite 100

Dallas, Texas 75019

(Address of principal executive offices)

(972) 870-6400

Registrant’s telephone number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	BCOR	NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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. ☐

Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On February 16, 2022, Blucora, Inc. (the “Company”) announced its financial results for the quarter and year ended December 31, 2021. Copies of the press release and supplemental financial information are furnished to, but not filed with, the Securities and Exchange Commission (the "SEC") as Exhibits 99.1 and 99.2 hereto.

The press release and supplemental financial information include non-GAAP financial measures as that term is defined in Regulation G. The press release and supplemental financial information also include the most directly comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”), information reconciling the non-GAAP financial measures to the GAAP financial measures, and a discussion of the reasons why the Company’s management believes that the presentation of the non-GAAP financial measures provides useful information to investors regarding the Company’s results of operations and financial condition. The non-GAAP financial information presented therein should be considered in addition to, not as a substitute for, or superior to, financial measures calculated and presented in accordance with GAAP.

Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits


Exhibit No						Description

99.1						Press release dated February 16, 2022
99.2						Supplemental financial information dated February 16, 2022
104.1						Cover Page Interactive Data File (embedded within the Inline XBRL Document)

Safe Harbor Statement Under the Private Securities and Litigation Reform Act

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, including without limitation, statements regarding the outlook of the Company and its segments, expectations regarding net flows for its wealth business, and expectations with respect to the current tax season. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements can also be identified by words such as “believes,” “estimates,” “should,” “could,” “would,” “plans,” “expects,” “intends,” “anticipates,” “may,” “forecasts,” “future,” “will,” “projects,” “predicts,” “potential,” “continues,” “target,” “outlook,” "guidance" and similar expressions and variations. Actual results may differ significantly from management’s expectations due to various risks and uncertainties including, but not limited to: our ability to effectively compete within our industries; our ability to attract and retain financial professionals, qualified employees, clients, and customers, as well as our ability to provide strong customer/client service; the impact of the COVID-19 pandemic on our results of operations and our business, including the impact of the resulting economic and market disruption, the extension of tax filing deadlines and other related government actions; our ability to retain employees and acquired client assets following acquisitions; our future capital requirements and the availability of financing, if necessary; our ability to meet our current and future debt service obligations, including our ability to maintain compliance with our debt covenants; any downgrade of the Company’s credit ratings; our ability to generate strong performance for our clients and the impact of the financial markets on our clients’ portfolios; the impact of new or changing legislation and regulations (or interpretations thereof) on our business, including our ability to successfully address and comply with such legislation and regulations (or interpretations thereof) and increased costs, reductions of revenue, and potential fines, penalties or disgorgement to which we may be subject as a result thereof; risks, burdens, and costs, including fines, penalties, or disgorgement, associated with our business being subjected to regulatory inquiries, investigations, or initiatives including those of the Financial Industry Regulatory Authority, Inc. and the SEC; risks associated with legal proceedings, including litigation and regulatory proceedings; our ability to close, finance, and realize all of the anticipated benefits of acquisitions, as well as our ability to integrate the operations of recently acquired businesses, and the potential impact of such acquisitions on our existing indebtedness and leverage; the compromising of confidentiality, availability or integrity of information, including cyberattacks; our ability to manage leadership and employee transitions, including costs and time burdens on management and our board of directors related thereto; political and economic conditions and events that directly or indirectly impact the wealth management and tax preparation software industries; our ability to respond to rapid technological changes, including our ability to successfully release new products and services or improve upon existing products and services; our expectations concerning the revenues we generate from fees associated with the financial products that we distribute; risks related to goodwill and other intangible asset impairment; our ability to develop, establish, and maintain strong brands; risks associated with the use and implementation of information technology and the effect of security breaches, computer viruses, and computer hacking attacks; our ability to comply with laws and regulations regarding privacy and protection of user data; our ability to maintain our relationships with third-party partners, providers,

suppliers, vendors, distributors, contractors, financial institutions, industry associations, and licensing partners, and our expectations regarding and reliance on the products, tools, platforms, systems, and services provided by these third parties; our beliefs and expectations regarding the seasonality of our business; our assessments and estimates that determine our effective tax rate; our ability to protect our intellectual property and the impact of any claim that we have infringed on the intellectual property rights of others; and the effects on our business of actions of activist stockholders. A more detailed description of these and certain other factors that could affect actual results is included in the Company’s most recent Annual Report on Form 10-K and most recent Quarterly report on Form 10-Q filed with the SEC. 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.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


			BLUCORA, INC.

			By			/s/ Marc Mehlman
						Marc Mehlman
						Chief Financial Officer

						February 16, 2022

Exhibit 99.1

Blucora Reports Fourth Quarter and Full Year 2021 Results

DALLAS, TX — February 16, 2022 — Blucora, Inc. (NASDAQ: BCOR), a leading provider of technology-enabled, tax focused financial solutions, today announced financial results for the fourth quarter and full year ended December 31, 2021.

Fourth Quarter and Full Year 2021 Highlights and Recent Developments

•Grew total revenue 17% for full year 2021 to $885.2 million.

•Ended year with total client assets of $89.1 billion, growing percent of advisory assets over 400bps to 47.3%. Advisory assets at year-end were $42.2 billion.

•Closed eight transactions, migrating nearly $2.0 billion in assets from the independent model to the employee-based RIA model.

•Successfully held TaxAct consumer e-files flat at 3.2 million, with no decrease for the first time since 2014.

•Launched Xpert Assist, providing all TaxAct filers access to a team of CPAs and tax experts at no cost, and premium Xpert Full Service, a personalized service for simple and complex return completion.

“Blucora made substantial progress in 2021, positioning the business for sustainable and profitable growth. Our team continued to exceed expectations as we achieved or exceeded all elements of our outlook from last quarter and we are on track to achieve our three-year revenue and EBITDA growth goals. My thanks go out to all of our team and our financial professionals for the hard work in achieving these goals,” commented Chris Walters, Blucora’s President and Chief Executive Officer. Mr. Walters continued, “The continued progress that we have seen across the business allows us to confirm our expectations of positive net flows for the wealth business and our outlook for strong continued momentum in tax software in the current tax season.”

Full Year 2022 Tax Software Outlook

With the tax season now underway and positive early results from the Company’s new marketing efforts and from its new product and service offerings, Blucora is reconfirming its full-year 2022 outlook for the Tax Software segment to provide revenue growth of between 14% and 18% from the mid-point of our full-year 2021 guidance range, $226 million, as presented on November 4, 2021 and segment operating income of between $98 and $106 million.

Summary Financial Performance: Q4 and Full Year 2021

($ in millions, except per share amounts)


	Q4 2021		Q4 2020		Change		Full Year 2021		Full Year 2020		Change
Revenue:
Wealth Management	$	172.2	$	149.4	15	%	$	658.2	$	546.2	21	%
Tax Software	6.1		5.8		5	%	227.0		208.8		9	%
Total Revenue	$	178.3	$	155.2	15	%	$	885.2	$	755.0	17	%
Segment Operating Income (Loss)
Wealth Management	$	21.9	$	20.4	7	%	$	82.2	$	72.2	14	%
Tax Software	(18.6)		(11.0)		(69)	%	81.9		49.6		65	%
Total Segment Operating Income	$	3.3	$	9.3	(65)	%	$	164.1	$	121.8	35	%
Unallocated Corporate-Level General and Administrative Expenses	$	(7.1)	$	(7.1)	—	%	$	(25.6)	$	(26.7)	4	%
GAAP:
Operating Income (Loss)	$	(28.0)	$	(23.7)	(18)	%	$	30.6	$	(269.1)	111	%
Net Income (Loss)	$	(23.7)	$	(50.7)	53	%	$	7.8	$	(342.8)	102	%
Net Income (Loss) per share - Diluted	$	(0.49)	$	(1.05)	53	%	$	0.16	$	(7.14)	102	%
Non-GAAP:
Adjusted EBITDA (1)	$	(3.8)	$	2.2	(273)	%	$	138.5	$	95.1	46	%
Net Income (Loss) (1)	$	(14.1)	$	(9.0)	(57)	%	$	87.2	$	54.1	61	%
Net Income (Loss) per share — Diluted (1)	$	(0.29)	$	(0.19)	(53)	%	$	1.76	$	1.12	57	%

_________________________

(1)See reconciliations of all non-GAAP to GAAP measures presented in this release in the tables below.

First Quarter 2022 Outlook


($ in millions, except per share amounts)			First Quarter 2022 Outlook
Wealth Management Revenue			$164.5 - $171.5
Tax Software Revenue			$150.0 - $175.0
Total Revenue			$314.5 - $346.5
Wealth Management Segment Operating Income			$19.5 - $22.0
Tax Software Segment Operating Income			$57.0 - $77.0
Unallocated Corporate-Level General and Administrative Expenses			$7.0 - $7.5
GAAP:
Net Income			$38.0 - $62.0
Net Income per share - Diluted			$0.75 - $1.23
Non-GAAP:
Adjusted EBITDA (1)			$69.0 - $92.0
Non-GAAP Net Income (1)			$52.5 - $76.5
Non-GAAP Net Income per share — Diluted (1)			$1.04 - $1.52

____________________________

(1)See reconciliations of all non-GAAP to GAAP measures presented in this release in the tables below.

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 2021 results, its outlook for 2022 and other business matters. We will also provide supplemental financial information to our results on the Investor Relations section of the Blucora corporate website at www.blucora.com prior to the call. A replay of the call will be available on our website.

About Blucora®

Blucora, Inc. (NASDAQ: BCOR) is a provider of data and technology-driven solutions that empower people to improve their financial wellness. Blucora operates in two segments (i) wealth management, through its Avantax Wealth Management and Avantax Planning Partners brands, with a collective $89 billion in total client assets as of December 31, 2021 and (ii) tax software, through its TaxAct business, a market leader in tax software with over 3 million consumer users and approximately 24,500 professional users in 2021. With integrated tax-focused software and wealth management, Blucora is uniquely positioned to assist our customers in achieving better long-term outcomes via holistic, tax-advantaged solutions. For more information on Blucora, visit www.blucora.com.

Source: Blucora

Blucora Investor Relations

Dee Littrell (972) 870-6463

[email protected]

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. including without limitation, statements regarding the outlook of Blucora, Inc. (the “Company”) and its segments, expectations regarding net flows for its wealth business, and expectations with respect to the current tax season. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements can also be identified by words such as “believes,” “estimates,” “should,” “could,” “would,” “plans,” “expects,” “intends,” “anticipates,” “may,” “forecasts,” “future,” “will,” “projects,” “predicts,” “potential,” “continues,” “target,” “outlook,” “guidance,” and similar expressions and variations. Actual results may differ significantly from management’s expectations due to various risks and uncertainties including, but not limited to: our ability to effectively compete within our industries; our ability to attract and retain financial professionals, qualified employees, clients, and customers, as well as our ability to provide strong customer/client service; the impact of the COVID-19 pandemic on our results of operations and our business, including the impact of the resulting economic and market disruption, the extension of tax filing deadlines and other related government actions; our ability to retain employees and acquired client assets following acquisitions; our future capital requirements and the availability of financing, if necessary; our ability to meet our current and future debt service obligations, including our ability to maintain compliance with our debt covenants; any downgrade of the Company’s credit ratings; our ability to generate strong performance for our clients and the impact of the financial markets on our clients’ portfolios; the impact of new or changing legislation and regulations (or interpretations thereof) on our business, including our ability to successfully address and comply with such legislation and regulations (or interpretations thereof) and increased costs, reductions of revenue, and potential fines, penalties or disgorgement to which we may be subject as a result thereof; risks, burdens, and costs, including fines, penalties, or disgorgement, associated with our business being subjected to regulatory inquiries, investigations, or initiatives, including those of the Financial Industry Regulatory Authority, Inc. and the Securities and Exchange Commission (“SEC”); risks associated with legal proceedings, including litigation and regulatory proceedings; our ability to close, finance, and realize all of the anticipated benefits of acquisitions, as well as our ability to integrate the operations of recently acquired businesses, and the potential impact of such acquisitions on our existing indebtedness and leverage; the compromising of confidentiality, availability or integrity of information, including cyberattacks; our ability to manage leadership and employee transitions, including costs and time burdens on management and our board of directors related thereto; political and economic conditions and events that directly or indirectly impact the wealth management and tax preparation software industries; our ability to respond to rapid technological changes, including our ability to successfully release new products and services or improve upon existing products and services; our expectations concerning the revenues we generate from fees associated with the financial products that we distribute; risks related to goodwill and other intangible asset impairment; our ability to develop, establish, and maintain strong brands; risks associated with the use and implementation of information technology and the effect of security breaches, computer viruses, and computer hacking attacks; our ability to comply with laws and regulations regarding privacy and protection of user data; our ability to maintain our relationships with third-party partners, providers, suppliers, vendors, distributors, contractors, financial institutions, industry associations, and licensing partners, and our expectations regarding and reliance on the products, tools, platforms, systems, and services provided by these third parties; our beliefs and expectations regarding the seasonality of our business; our assessments and estimates that determine our effective tax rate; our ability to protect our intellectual property and the impact of any claim that we have infringed on the intellectual property rights of others; and the effects on our business of actions of activist stockholders. A more detailed description of these and certain other factors that could affect actual results is included in the Company’s most recent Annual Report on Form 10-K and most recent Quarterly Report on Form 10-Q filed with the SEC. 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.

Important Additional Information

The Company intends to file a definitive proxy statement, accompanying BLUE proxy card and other relevant documents with the SEC in connection with the solicitation of proxies for the Company’s 2022 annual meeting of stockholders (the “Annual Meeting”). BEFORE MAKING ANY VOTING DECISION, STOCKHOLDERS OF THE COMPANY ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH OR FURNISHED TO THE SEC, INCLUDING THE COMPANY’S DEFINITIVE PROXY STATEMENT AND ANY AMENDMENTS AND SUPPLEMENTS THERETO, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and stockholders will be able to obtain a copy of the definitive proxy statement and other documents filed by the Company with the SEC free of charge from the SEC’s website at www.sec.gov. In addition, copies will be available at no charge by selecting “SEC Filings” under “Financial Information” in the “Investors” tab of the Company’s website at www.blucora.com.

The Company, its directors and certain of its executive officers are participants in the solicitation of proxies from the Company’s stockholders in connection with the Annual Meeting. The names of these directors and executive officers and their respective direct and indirect interests, by security holdings or otherwise, in the Company are set forth in the Company’s Current Report on Form 8-K filed with the SEC on February 14, 2022.

Blucora, Inc.

Condensed Consolidated Statements of Operations

(Unaudited) (In thousands, except per share data)


	Three months ended December 31,				Year ended December 31,
	2021		2020		2021		2020
Revenue:
Wealth Management	$	172,192	$	149,384	$	658,213	$	546,189
Tax Software	6,139		5,773		226,987		208,763
Total revenue	178,331		155,157		885,200		754,952
Operating expenses:
Cost of revenue:
Wealth Management	121,119		103,630		464,293		385,962
Tax Software	3,228		2,569		15,558		12,328

Total cost of revenue	124,347		106,199		479,851		398,290
Engineering and technology	8,471		5,359		30,704		27,258
Sales and marketing	32,522		26,833		173,331		177,618
General and administrative	27,052		18,625		98,671		82,158
Acquisition and integration	4,285		12,303		32,798		31,085
Depreciation	2,535		1,948		10,906		7,293
Amortization of acquired intangible assets	7,073		7,578		28,320		29,745
Impairment of goodwill	—		—		—		270,625
Total operating expenses	206,285		178,845		854,581		1,024,072
Operating income (loss)	(27,954)		(23,688)		30,619		(269,120)
Interest expense and other, net (1)	(7,878)		(7,918)		(32,080)		(31,304)
Loss before income taxes	(35,832)		(31,606)		(1,461)		(300,424)
Income tax benefit (expense)	12,138		(19,094)		9,218		(42,331)
Net income (loss)	$	(23,694)	$	(50,700)	$	7,757	$	(342,755)

Net income (loss) per share:
Basic	$	(0.49)	$	(1.05)	$	0.16	$	(7.14)
Diluted	$	(0.49)	$	(1.05)	$	0.16	$	(7.14)

Weighted average shares outstanding:
Basic	48,834		48,107		48,578		47,978
Diluted	48,834		48,107		49,526		47,978

_________________________

(1)Interest expense and other, net consisted of the following (in thousands):


	Three months ended December 31,				Year ended December 31,
	2021		2020		2021		2020
Interest expense	$	7,018	$	7,160	$	28,807	$	24,570
Amortization of debt issuance costs	394		366		1,522		1,372
Accretion of debt discounts	295		279		1,146		693
Total interest expense	7,707		7,805		31,475		26,635
Interest income	(19)		(38)		(21)		(65)
Gain on sale of a business	—		—		—		(349)
Non-capitalized debt issuance expenses	—		—		—		3,687
Other	190		151		626		1,396
Interest expense and other, net	$	7,878	$	7,918	$	32,080	$	31,304

Blucora, Inc.

Condensed Consolidated Balance Sheets

(Unaudited) (In thousands)


	December 31,
	2021		2020
ASSETS
Current assets:
Cash and cash equivalents	$	134,824	$	150,125
Cash segregated under federal or other regulations	—		637
Accounts receivable, net	21,906		12,736
Commissions and advisory fees receivable	25,073		26,132

Prepaid expenses and other current assets	18,476		11,038
Total current assets	200,279		200,668
Long-term assets:
Property, equipment, and software, net	73,638		58,500
Right-of-use assets, net	20,466		23,455
Goodwill	454,821		454,821
Acquired intangible assets, net	302,289		322,179

Other long-term assets	20,450		4,569
Total long-term assets	871,664		863,524
Total assets	$	1,071,943	$	1,064,192
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	8,216	$	9,290
Commissions and advisory fees payable	17,940		19,021
Accrued expenses and other current liabilities	65,678		56,419
Current deferred revenue	13,180		12,298
Current lease liabilities	4,896		2,304
Current portion of long-term debt	1,812		1,812
Total current liabilities	111,722		101,144
Long-term liabilities:
Long-term debt, net	553,134		552,525
Deferred tax liabilities, net	20,124		30,663
Long-term deferred revenue	5,322		6,247
Long-term lease liabilities	33,267		36,404
Other long-term liabilities	6,752		24,919
Total long-term liabilities	618,599		650,758
Total liabilities	730,321		751,902



Stockholders’ equity:
Common stock, par value $0.0001 per share—900,000 authorized shares; 50,137 shares issued and 48,831 shares outstanding at December 31, 2021; 49,483 shares issued and 48,177 shares outstanding at December 31, 2020	5		5
Additional paid-in capital	1,619,805		1,598,230
Accumulated deficit	(1,249,789)		(1,257,546)

Treasury stock, at cost—1,306 shares at December 31, 2021 and December 31, 2020	(28,399)		(28,399)
Total stockholders’ equity	341,622		312,290
Total liabilities and stockholders’ equity	$	1,071,943	$	1,064,192

Blucora, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited) (In thousands)


	Year ended December 31,
	2021		2020
Operating activities:
Net income (loss)	$	7,757	$	(342,755)
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation and amortization of acquired intangible assets	43,426		39,907
Stock-based compensation	20,754		10,066
Impairment of goodwill	—		270,625

Reduction of right-of-use lease assets	3,046		8,908
Deferred income taxes	(10,539)		41,059
Amortization of debt discount and issuance costs	2,668		2,065

Gain on sale of a business	—		(349)
Change in the fair value of acquisition-related contingent consideration	22,400		8,300
Accretion of lease liabilities	1,250		1,922
Other non-cash expenses	2,602		1,508
Changes in operating assets and liabilities, net of acquisitions and disposals:

Accounts receivable, net	(9,152)		10,705
Commissions and advisory fees receivable	1,059		(4,956)

Prepaid expenses and other current assets	(7,438)		3,847
Other long-term assets	(17,861)		2,232
Accounts payable	(1,074)		(4,192)
Commissions and advisory fees payable	(857)		(884)
Lease liabilities	(1,853)		(3,894)
Deferred revenue	(43)		(796)
Accrued expenses and other current and long-term liabilities	(19,314)		761
Net cash provided by operating activities	36,831		44,079
Investing activities:
Purchases of property, equipment, and software, net	(30,276)		(36,002)
Business acquisitions, net of cash acquired	—		(101,910)

Asset acquisitions	(8,316)		(3,143)
Proceeds from sale of a business, net of cash	—		349
Net cash used by investing activities	(38,592)		(140,706)
Financing activities:
Proceeds from credit facilities, net of debt issuance costs and debt discounts	(502)		226,278
Payments on credit facilities	(1,812)		(66,531)
Acquisition-related contingent consideration payments	(14,075)		—





Proceeds from stock option exercises	579		97
Proceeds from issuance of stock through employee stock purchase plan	3,277		2,258
Tax payments from shares withheld for equity awards	(1,644)		(1,163)
Net cash provided (used) by financing activities	(14,177)		160,939








Net increase (decrease) in cash, cash equivalents, and restricted cash	(15,938)		64,312
Cash, cash equivalents, and restricted cash, beginning of period	150,762		86,450
Cash, cash equivalents, and restricted cash, end of period	$	134,824	$	150,762

Blucora, Inc.

Segment Information

(Unaudited) (In thousands)

Information on reportable segments and a reconciliation to consolidated net income (loss) are presented below (in thousands):


	Three months ended December 31,				Year ended December 31,
	2021		2020		2021		2020
Revenue:
Wealth Management	$	172,192	$	149,384	$	658,213	$	546,189
Tax Software	6,139		5,773		226,987		208,763
Total revenue	178,331		155,157		885,200		754,952
Operating income (loss):
Wealth Management	21,856		20,368		82,212		72,195
Tax Software	(18,593)		(11,025)		81,879		49,621
Corporate-level activity	(31,217)		(33,031)		(133,472)		(390,936)
Total operating income (loss)	(27,954)		(23,688)		30,619		(269,120)
Interest expense and other, net	(7,878)		(7,918)		(32,080)		(31,304)
Loss before income taxes	(35,832)		(31,606)		(1,461)		(300,424)
Income tax benefit (expense)	12,138		(19,094)		9,218		(42,331)
Net income (loss)	$	(23,694)	$	(50,700)	$	7,757	$	(342,755)

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


	Three months ended December 31,				Year ended December 31,
	2021		2020		2021		2020
Wealth Management:
Advisory revenue	$	104,633	$	87,079	$	395,800	$	314,751
Commission revenue	53,480		49,864		210,677		185,201
Asset-based revenue	5,587		4,777		22,101		23,688
Transaction and fee revenue	8,492		7,664		29,635		22,549
Total Wealth Management revenue	$	172,192	$	149,384	$	658,213	$	546,189
Tax Software:
Consumer revenue	$	5,857	$	5,502	$	209,748	$	192,226
Professional revenue	282		271		17,239		16,537
Total Tax Software revenue	$	6,139	$	5,773	$	226,987	$	208,763

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


	Three months ended December 31,				Year ended December 31,
	2021		2020			2021		2020
Unallocated corporate-level general and administrative expenses	$	7,103	$	7,118		$	25,555	$	26,689
Stock-based compensation	5,255		2,846			20,754		10,066
Acquisition and integration	4,285		12,303			32,798		31,085
Depreciation	3,855		2,710			15,106		10,162
Amortization of acquired intangible assets	7,073		7,578			28,320		29,745
Contested proxy and other legal and consulting costs	3,646		—			10,939		—
Executive transition costs	—		476			—		10,701
Headquarters relocation costs	—		—			—		1,863
Impairment of goodwill	—		—			—		270,625
Total corporate-level activity	$	31,217	$	33,031		$	133,472	$	390,936

Blucora, Inc.

Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures (1)

Adjusted EBITDA Reconciliation (1)

(Unaudited, in thousands)


	Three months ended December 31,				Year ended December 31,
	2021		2020		2021		2020
Net income (loss) (2)	$	(23,694)	$	(50,700)	$	7,757	$	(342,755)
Stock-based compensation	5,255		2,846		20,754		10,066
Depreciation and amortization of acquired intangible assets	10,928		10,288		43,426		39,907
Interest expense and other, net	7,878		7,918		32,080		31,304
Acquisition and integration—Excluding change in the fair value of HKFS Contingent Consideration	1,385		3,003		10,398		22,785
Acquisition and integration—Change in the fair value of HKFS Contingent Consideration	2,900		9,300		22,400		8,300
Contested proxy and other legal and consulting costs	3,646		—		10,939		—
Impairment of goodwill	—		—		—		270,625
Executive transition costs	—		476		—		10,701
Headquarters relocation costs	—		—		—		1,863
Income tax (benefit) expense	(12,138)		19,094		(9,218)		42,331
Adjusted EBITDA (1)	$	(3,840)	$	2,225	$	138,536	$	95,127

Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) Per Share Reconciliation (1)

(Unaudited, in thousands, except per share amounts)


	Three months ended December 31,				Year ended December 31,
	2021		2020		2021		2020
Net income (loss) (2)	$	(23,694)	$	(50,700)	$	7,757	$	(342,755)
Stock-based compensation	5,255		2,846		20,754		10,066
Amortization of acquired intangible assets	7,073		7,578		28,320		29,745
Acquisition and integration—Excluding change in the fair value of HKFS Contingent Consideration	1,385		3,003		10,398		22,785
Acquisition and integration—Change in the fair value of HKFS Contingent Consideration	2,900		9,300		22,400		8,300
Contested proxy and other legal and consulting costs	3,646		—		10,939		—
Impairment of goodwill	—		—		—		270,625
Executive transition costs	—		476		—		10,701
Non-capitalized debt issuance expenses	—		—		—		3,687
Headquarters relocation costs	—		—		—		1,863
Gain on sale of a business	—		—		—		(349)
Cash tax impact of adjustments to GAAP net income (loss)	(351)		(234)		(1,874)		(1,647)
Non-cash income tax (benefit) expense	(10,345)		18,732		(11,505)		41,059
Non-GAAP Net Income (Loss) (1)	$	(14,131)	$	(8,999)	$	87,189	$	54,080
Per diluted share:
Net income (loss) (2)	$	(0.49)	$	(1.05)	$	0.16	$	(7.10)
Stock-based compensation	0.11		0.06		0.42		0.21
Amortization of acquired intangible assets	0.14		0.15		0.57		0.61
Acquisition and integration—Excluding change in the fair value of HKFS Contingent Consideration	0.03		0.06		0.21		0.47
Acquisition and integration—Change in the fair value of HKFS Contingent Consideration	0.06		0.19		0.45		0.17
Contested proxy and other legal and consulting costs	0.08		—		0.22		—
Impairment of goodwill	—		—		—		5.61
Executive transition costs	—		0.01		—		0.22
Non-capitalized debt issuance expenses	—		—		—		0.08
Headquarters relocation costs	—		—		—		0.04
Gain on sale of a business	—		—		—		(0.01)
Cash tax impact of adjustments to GAAP net income (loss)	(0.01)		—		(0.04)		(0.03)
Non-cash income tax (benefit) expense	(0.21)		0.39		(0.23)		0.85
Non-GAAP Net Income (Loss) per share - Diluted (1)(3)	$	(0.29)	$	(0.19)	$	1.76	$	1.12
Diluted weighted average shares outstanding (3)	48,834		48,107		49,526		48,244

Adjusted EBITDA Reconciliation for Forward-Looking Guidance (1)

(Unaudited, in thousands)


	Ranges for the quarter ending
	March 31, 2022
		Low		High
Net income		$	38,000	$	62,000
Stock-based compensation		6,000		6,000
Depreciation and amortization of acquired intangible assets		12,000		11,500
Interest expense and other, net		8,000		7,500
Acquisition, integration, and contested proxy and other legal and consulting costs (4)		2,000		2,000
Income tax expense		3,000		3,000
Adjusted EBITDA (1)		$	69,000	$	92,000

Non-GAAP Net Income and Non-GAAP Net Income Per Share Reconciliation

for Forward-Looking Guidance (1)

(Unaudited, in thousands, except per share amounts)


	Ranges for the quarter ending
	March 31, 2022
		Low		High
Net income		$	38,000	$	62,000
Stock-based compensation		6,000		6,000
Amortization of acquired intangible assets		7,000		7,000
Acquisition, integration, and contested proxy and other legal and consulting costs (4)		2,000		2,000
Cash tax impact of adjustments to net income		(300)		(300)
Non-cash income tax (benefit) expense		(200)		(200)
Non-GAAP Net Income (1)		$	52,500	$	76,500
Per diluted share:
Net income		$	0.75	$	1.23
Stock-based compensation		0.12		0.12
Amortization of acquired intangible assets		0.14		0.14
Acquisition, integration, and contested proxy and other legal and consulting costs (4)		0.04		0.04
Cash tax impact of adjustments to net income		(0.01)		(0.01)
Non-cash income tax (benefit) expense		—		—
Non-GAAP Net Income per share - Diluted (1)(3)		$	1.04	$	1.52
Diluted weighted average shares outstanding (3)		50,285		50,285

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

(1)We define Adjusted EBITDA as net income (loss), determined in accordance with GAAP, excluding the effects of stock-based compensation, depreciation and amortization of acquired intangible assets, interest expense and other, net, acquisition and integration costs, contested proxy and other legal and consulting costs, impairment of goodwill, executive transition costs, headquarters relocation costs, and income tax benefit (expense). Interest expense and other, net primarily consists of interest expense, net and non-capitalized debt issuance expenses. Acquisition and integration costs primarily relate to the acquisition of Avantax Planning Partners (formerly “HKFS”) and 1st Global. Impairment of goodwill relates to the impairment of our Wealth Management reporting unit goodwill in the first quarter of 2020. Executive transition costs relate to the departure of certain Company executives in the first quarter of 2020. Headquarters relocation costs relate to the process of moving from our Dallas and Irving offices to our new headquarters.

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), determined in accordance with GAAP, excluding the effects of stock-based compensation, amortization of acquired intangible assets, acquisition and integration costs, contested proxy and other legal and consulting costs, impairment of goodwill, executive transition costs, non-capitalized debt issuance expenses, headquarters relocation costs, gain on the sale of a business, the related cash tax impact of those adjustments, and non-cash income tax (benefit) expense. 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 not utilized, between 2022 and 2024. Gain on the sale of a business relates to the disposition of SimpleTax in 2019 and the subsequent working capital adjustment in the third quarter of 2020. Non-capitalized debt issuance expenses relate to the expense recognized as a result of the Term Loan increase in the third quarter of 2020.

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 that 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 GAAP net income (loss) per share. Other companies may calculate Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) per share differently, and, therefore, these measures may not be comparable to similarly titled measures of other companies.

(2)As presented in the condensed consolidated statements of operations (unaudited).

(3)Any difference in the “per diluted share” amounts between this table and the condensed consolidated statements of operations (unaudited) is due to using different diluted weighted average shares outstanding in the event that there is GAAP net loss but Non-GAAP Net Income and vice versa.

(4)The breakout of components cannot be determined on a forward-looking basis without unreasonable efforts.

Exhibit 99.2

Blucora, Inc.

Supplemental Information

December 31, 2021

Table of Contents


			Page
Financial Information:
Condensed Consolidated Statements of Operations (Unaudited)			2
Condensed Consolidated Financial Results (Unaudited)			3
Reconciliation of Certain Non-GAAP Financial Measures to the Nearest Comparable GAAP Financial Measures			5
Net Leverage Ratio			7
Reconciliation of Operating Free Cash Flow			8

Operating Metrics:
Wealth Management			9
Tax Software			11

Blucora Condensed Consolidated Statements of Operations


(Unaudited, in thousands, except % and per share amounts. Rounding differences may exist)	2019		2020										2021
	FY 12/31		1Q		2Q		3Q		4Q		FY 12/31		1Q		2Q		3Q		4Q		FY 12/31
Segment revenue:
Wealth Management	$	507,979	$	144,989	$	115,884	$	135,932	$	149,384	$	546,189	$	154,491	$	162,395	$	169,135	$	172,192	$	658,213
Tax Software	209,966		118,331		45,238		39,421		5,773		208,763		123,892		91,917		5,039		6,139		226,987
Total segment revenue	717,945		263,320		161,122		175,353		155,157		754,952		278,383		254,312		174,174		178,331		885,200
Operating expenses:
Cost of revenue:
Wealth Management	352,081		102,342		83,868		96,122		103,630		385,962		108,623		113,910		120,641		121,119		464,293
Tax Software	10,691		4,013		3,054		2,692		2,569		12,328		5,578		4,429		2,323		3,228		15,558

Total segment cost of revenue	362,772		106,355		86,922		98,814		106,199		398,290		114,201		118,339		122,964		124,347		479,851
Engineering and technology	30,931		8,515		7,377		6,007		5,359		27,258		7,128		7,231		7,874		8,471		30,704
Sales and marketing	126,205		79,710		40,057		31,018		26,833		177,618		77,562		34,848		28,399		32,522		173,331
General and administrative	78,529		24,728		20,200		18,605		18,625		82,158		24,685		23,832		23,102		27,052		98,671
Acquisition and integration	25,763		5,682		2,824		10,276		12,303		31,085		8,103		18,169		2,241		4,285		32,798
Depreciation	5,479		1,796		1,675		1,874		1,948		7,293		2,300		3,204		2,867		2,535		10,906
Amortization of acquired intangible assets	37,357		7,748		6,673		7,746		7,578		29,745		7,175		7,063		7,009		7,073		28,320
Impairment of goodwill and an intangible asset (1)	50,900		270,625		—		—		—		270,625		—		—		—		—		—

Total operating expenses	717,936		505,159		165,728		174,340		178,845		1,024,072		241,154		212,686		194,456		206,285		854,581
Operating income (loss)	9		(241,839)		(4,606)		1,013		(23,688)		(269,120)		37,229		41,626		(20,282)		(27,954)		30,619
Interest expense and other, net	(16,915)		(6,135)		(5,288)		(11,963)		(7,918)		(31,304)		(7,883)		(8,024)		(8,295)		(7,878)		(32,080)
Income (loss) before income taxes	(16,906)		(247,974)		(9,894)		(10,950)		(31,606)		(300,424)		29,346		33,602		(28,577)		(35,832)		(1,461)
Income tax benefit (expense)	65,054		(67,520)		59,539		(15,256)		(19,094)		(42,331)		(1,700)		(1,994)		774		12,138		9,218

Net income (loss)	$	48,148	$	(315,494)	$	49,645	$	(26,206)	$	(50,700)	$	(342,755)	$	27,646	$	31,608	$	(27,803)	$	(23,694)	$	7,757

Net income (loss) per share:
Basic	$	1.00	$	(6.60)	$	1.04	$	(0.55)	$	(1.05)	$	(7.14)	$	0.57	$	0.65	$	(0.57)	$	(0.49)	$	0.16
Diluted	$	0.98	$	(6.60)	$	1.03	$	(0.55)	$	(1.05)	$	(7.14)	$	0.56	$	0.64	$	(0.57)	$	(0.49)	$	0.16

Weighted average shares outstanding:
Basic	48,264		47,827		47,941		48,039		48,107		47,978		48,261		48,508		48,707		48,834		48,578
Diluted	49,282		47,827		48,092		48,039		48,107		47,978		49,097		49,385		48,707		48,834		49,526

____________________________

(1)In the first quarter of 2020, we recognized a $270.6 million goodwill impairment related to our Wealth Management reporting unit. In 2019, we recognized a $50.9 million impairment of an intangible asset related to the HD Vest trade name intangible asset.

Blucora Condensed Consolidated Financial Results (1)


(Unaudited, in thousands, except % and per share amounts. Rounding differences may exist)	2019			2020															2021
	FY 12/31			1Q			2Q			3Q			4Q			FY 12/31			1Q			2Q			3Q			4Q			FY 12/31
Segment revenue:
Wealth Management (1)	$	507,979		$	144,989		$	115,884		$	135,932		$	149,384		$	546,189		$	154,491		$	162,395		$	169,135		$	172,192		$	658,213
Tax Software (2)	209,966			118,331			45,238			39,421			5,773			208,763			123,892			91,917			5,039			6,139			226,987
Total segment revenue	$	717,945		$	263,320		$	161,122		$	175,353		$	155,157		$	754,952		$	278,383		$	254,312		$	174,174		$	178,331		$	885,200
Segment operating income: (3)
Wealth Management (1)	$	68,292		$	22,598		$	11,731		$	17,498		$	20,368		$	72,195		$	19,396		$	21,396		$	19,564		$	21,856		$	82,212
Tax Software (2)	96,249			37,753			6,659			16,234			(11,025)			49,621			50,888			63,448			(13,864)			(18,593)			81,879
Total segment operating income	$	164,541		$	60,351		$	18,390		$	33,732		$	9,343		$	121,816		$	70,284		$	84,844		$	5,700		$	3,263		$	164,091
Segment operating income as a % of segment revenue:
Wealth Management (1)	13		%	16		%	10		%	13		%	14		%	13		%	13		%	13		%	12		%	13		%	12		%
Tax Software (2)	46		%	32		%	15		%	41		%	(191)		%	24		%	41		%	69		%	(275)		%	(303)		%	36		%
Total segment operating income as a % of segment revenue	23		%	23		%	11		%	19		%	6		%	16		%	25		%	33		%	3		%	2		%	19		%
Unallocated corporate-level general and administrative expenses (3)	$	27,361		$	7,016		$	5,810		$	6,745		$	7,118		$	26,689		$	5,694		$	6,259		$	6,499		$	7,103		$	25,555
Adjusted EBITDA (4)	$	137,180		$	53,335		$	12,580		$	26,987		$	2,225		$	95,127		$	64,590		$	78,585		$	(799)		$	(3,840)		$	138,536
Other unallocated corporate-level operating expenses: (3)
Stock-based compensation	$	16,300		$	(1,201)		$	3,904		$	4,517		$	2,846		$	10,066		$	5,610		$	5,160		$	4,729		$	5,255		$	20,754
Acquisition and integration—Excluding change in the fair value of acquisition-related contingent consideration	25,763			5,682			2,824			11,276			3,003			22,785			1,803			6,669			541			1,385			10,398
Acquisition and integration—Change in the fair value of acquisition-related contingent consideration	—			—			—			(1,000)			9,300			8,300			6,300			11,500			1,700			2,900			22,400
Depreciation	6,851			2,420			2,412			2,620			2,710			10,162			3,243			4,102			3,906			3,855			15,106
Amortization of acquired intangible assets	37,357			7,748			6,673			7,746			7,578			29,745			7,175			7,063			7,009			7,073			28,320
Executive transition costs	—			9,184			636			405			476			10,701			—			—			—			—			—
Headquarters relocation costs	—			716			737			410			—			1,863			—			—			—			—			—
Contested proxy and other legal and consulting costs	—			—			—			—			—			—			3,230			2,465			1,598			3,646			10,939
Impairment of goodwill and an intangible asset	50,900			270,625			—			—			—			270,625			—			—			—			—			—

Operating income (loss)	$	9		$	(241,839)		$	(4,606)		$	1,013		$	(23,688)		$	(269,120)		$	37,229		$	41,626		$	(20,282)		$	(27,954)		$	30,619
Unallocated interest expense and other, net: (3)
Interest expense	$	19,017		$	5,316		$	4,840		$	7,254		$	7,160		$	24,570		$	7,183		$	7,302		$	7,304		$	7,018		$	28,807
Amortization of debt issuance costs	1,042			313			331			362			366			1,372			363			377			388			394			1,522
Accretion of debt discounts	228			68			70			276			279			693			277			284			290			295			1,146
Total interest expense	20,287			5,697			5,241			7,892			7,805			26,635			7,823			7,963			7,982			7,707			31,475
Interest income	(449)			(14)			(11)			(2)			(38)			(65)			(2)			—			—			(19)			(21)
Gain on sale of a business	(3,256)			—			—			(349)			—			(349)			—			—			—			—			—
Non-capitalized debt issuance expenses	—			—			—			3,687			—			3,687			—			—			—			—			—
Other	333			452			58			735			151			1,396			62			61			313			190			626
Total interest expense and other, net	16,915			6,135			5,288			11,963			7,918			31,304			7,883			8,024			8,295			7,878			32,080
Income (loss) before income taxes	(16,906)			(247,974)			(9,894)			(10,950)			(31,606)			(300,424)			29,346			33,602			(28,577)			(35,832)			(1,461)
Income tax (benefit) expense:
Cash	3,564			483			158			269			362			1,272			1,969			2,688			(577)			(1,793)			2,287
Non-cash (5)	(68,618)			67,037			(59,697)			14,987			18,732			41,059			(269)			(694)			(197)			(10,345)			(11,505)
Total income tax (benefit) expense	(65,054)			67,520			(59,539)			15,256			19,094			42,331			1,700			1,994			(774)			(12,138)			(9,218)
GAAP Net Income (Loss)	$	48,148		$	(315,494)		$	49,645		$	(26,206)		$	(50,700)		$	(342,755)		$	27,646		$	31,608		$	(27,803)		$	(23,694)		$	7,757


GAAP Net Income (Loss) per share - Diluted	$	0.98		$	(6.60)		$	1.03		$	(0.55)		$	(1.05)		$	(7.14)		$	0.56		$	0.64		$	(0.57)		$	(0.49)		$	0.16
Non-GAAP Net Income (Loss) (4)	$	104,198		$	43,561		$	4,463		$	15,055		$	(8,999)		$	54,080		$	50,952		$	63,122		$	(12,754)		$	(14,131)		$	87,189
Non-GAAP Net Income (Loss) per share - Diluted (4) (6)	$	2.11		$	0.90		$	0.09		$	0.31		$	(0.19)		$	1.12		$	1.04		$	1.28		$	(0.26)		$	(0.29)		$	1.76

Basic weighted average shares outstanding	48,264			47,827			47,941			48,039			48,107			47,978			48,261			48,508			48,707			48,834			48,578
Diluted weighted average shares outstanding (6)	49,282			47,827			48,092			48,039			48,107			47,978			49,097			49,385			48,707			48,834			49,526

Notes to Condensed Consolidated Financial Results on next page

Notes to Condensed 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. The operations of Avantax Planning Partners (formerly "HKFS") are included in the Company's operating results as part of the Wealth Management segment beginning July 1, 2020 when HKFS was acquired.

(2)As a highly seasonal business, a significant portion of Tax Software revenue is typically generated in the first two quarters of the calendar year. In March 2020 and as a result of the COVID-19 pandemic, the Internal Revenue Service (“IRS”) extended the filing deadline for federal tax returns from April 15, 2020 to July 15, 2020. This filing extension resulted in the shifting of a significant portion of Tax Software segment revenue that is usually earned in the first and second quarters to the third quarter of 2020. As a result of the continued impact of the COVID-19 pandemic, including disruptions associated with the distribution of the second and third rounds of Economic Impact Payments, the IRS delayed the start of the 2021 tax season and extended the filing and payment deadline for tax year 2020 federal tax returns from April 15, 2021 to May 17, 2021. In addition, the IRS extended the federal filing and payment deadline for Texas, Louisiana, and Oklahoma to June 15, 2021. Beyond federal filings, the majority of states also extended their filing and payment deadlines for tax year 2020 state tax returns. This extension resulted in the shifting of a significant portion of Tax Software segment revenue that is usually earned in the first quarter to the second quarter of 2021.

(3)We do not allocate certain operating expenses (including personnel and overhead costs), stock-based compensation, acquisition and integration costs, depreciation, amortization of acquired intangible assets, executive transition costs, headquarters relocation costs, contested proxy and other legal and consulting costs, impairment of goodwill and an intangible asset, interest expense and other, net, or income taxes to the reportable segments. General and administrative costs are included in "Unallocated corporate-level expenses."

(4)See the Reconciliation of Certain Non-GAAP Financial Measures to the Nearest Comparable GAAP Financial Measures on page 5.

(5)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 primarily consist of U.S. federal net operating losses. The majority of these federal net operating losses will expire, if not utilized, between 2022 and 2024.

(6)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, diluted weighted average shares outstanding is the same as basic weighted average shares outstanding.

Blucora Reconciliation of Certain Non-GAAP Financial Measures to the Nearest Comparable GAAP Financial Measures (1) (2)


	2019		2020										2021
(Unaudited, in thousands, rounding differences may exist)	FY 12/31		1Q		2Q		3Q		4Q		FY 12/31		1Q		2Q		3Q		4Q		FY 12/31
Adjusted EBITDA (1)
Net income (loss) (2)	$	48,148	$	(315,494)	$	49,645	$	(26,206)	$	(50,700)	$	(342,755)	$	27,646	$	31,608	$	(27,803)	$	(23,694)	$	7,757
Stock-based compensation	16,300		(1,201)		3,904		4,517		2,846		10,066		5,610		5,160		4,729		5,255		20,754
Depreciation and amortization of acquired intangible assets	44,208		10,168		9,085		10,366		10,288		39,907		10,418		11,165		10,915		10,928		43,426
Interest expense and other, net	16,915		6,135		5,288		11,963		7,918		31,304		7,883		8,024		8,295		7,878		32,080
Acquisition and integration—Excluding change in the fair value of HKFS Contingent Consideration	25,763		5,682		2,824		11,276		3,003		22,785		1,803		6,669		541		1,385		10,398
Acquisition and integration—Change in the fair value of HKFS Contingent Consideration	—		—		—		(1,000)		9,300		8,300		6,300		11,500		1,700		2,900		22,400
Executive transition costs	—		9,184		636		405		476		10,701		—		—		—		—		—
Headquarters relocation costs	—		716		737		410		—		1,863		—		—		—		—		—
Contested proxy and other legal and consulting costs	—		—		—		—		—		—		3,230		2,465		1,598		3,646		10,939


Income tax (benefit) expense	(65,054)		67,520		(59,539)		15,256		19,094		42,331		1,700		1,994		(774)		(12,138)		(9,218)
Impairment of goodwill and an intangible asset	50,900		270,625		—		—		—		270,625		—		—		—		—		—
Adjusted EBITDA(1)	$	137,180	$	53,335	$	12,580	$	26,987	$	2,225	$	95,127	$	64,590	$	78,585	$	(799)	$	(3,840)	$	138,536
Non-GAAP Net Income (Loss) (1)
Net income (loss) (2)	$	48,148	$	(315,494)	$	49,645	$	(26,206)	$	(50,700)	$	(342,755)	$	27,646	$	31,608	$	(27,803)	$	(23,694)	$	7,757
Stock-based compensation	16,300		(1,201)		3,904		4,517		2,846		10,066		5,610		5,160		4,729		5,255		20,754
Amortization of acquired intangible assets	37,357		7,748		6,673		7,746		7,578		29,745		7,175		7,063		7,009		7,073		28,320
Acquisition and integration—Excluding change in the fair value of HKFS Contingent Consideration	25,763		5,682		2,824		11,276		3,003		22,785		1,803		6,669		541		1,385		10,398
Acquisition and integration—Change in the fair value of HKFS Contingent Consideration	—		—		—		(1,000)		9,300		8,300		6,300		11,500		1,700		2,900		22,400
Executive transition costs	—		9,184		636		405		476		10,701		—		—		—		—		—
Headquarters relocation costs	—		716		737		410		—		1,863		—		—		—		—		—
Contested proxy and other legal and consulting costs	—		—		—		—		—		—		3,230		2,465		1,598		3,646		10,939
Non-capitalized debt issuance expenses	—		—		—		3,687		—		3,687		—		—		—		—		—


Impairment of goodwill and an intangible asset	50,900		270,625		—		—		—		270,625		—		—		—		—		—
Gain on the sale of a business	(3,256)		—		—		(349)		—		(349)		—		—		—		—		—
Cash tax impact of adjustments to GAAP net income (loss)	(2,396)		(736)		(259)		(418)		(234)		(1,647)		(543)		(649)		(331)		(351)		(1,874)
Non-cash income tax (benefit) expense	(68,618)		67,037		(59,697)		14,987		18,732		41,059		(269)		(694)		(197)		(10,345)		(11,505)
Non-GAAP Net Income (Loss) (1)	$	104,198	$	43,561	$	4,463	$	15,055	$	(8,999)	$	54,080	$	50,952	$	63,122	$	(12,754)	$	(14,131)	$	87,189

Non-GAAP Net Income (Loss) per share - Diluted (1) (3)	$	2.11	$	0.90	$	0.09	$	0.31	$	(0.19)	$	1.12	$	1.04	$	1.28	$	(0.26)	$	(0.29)	$	1.76
Diluted weighted average shares outstanding (3)	49,282		48,253		48,092		48,203		48,107		48,244		49,097		49,385		48,707		48,834		49,526

Notes to Reconciliations of Certain Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures on next page

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

(1) We define Adjusted EBITDA as net income (loss), determined in accordance with GAAP, excluding the effects of stock-based compensation, depreciation and amortization of acquired intangible assets, interest expense and other, net, acquisition and integration costs, contested proxy and other legal and consulting costs, impairment of goodwill, executive transition costs, headquarters relocation costs, and income tax benefit (expense). Interest expense and other, net primarily consists of interest expense, net and non-capitalized debt issuance expenses. Acquisition and integration costs primarily relate to the acquisition of Avantax Planning Partners and 1st Global. Impairment of goodwill relates to the impairment of our Wealth Management reporting unit goodwill in the first quarter of 2020. Executive transition costs relate to the departure of certain Company executives in the first quarter of 2020. Headquarters relocation costs relate to the process of moving from our Dallas and Irving offices to our new headquarters.

(2) See the Condensed Consolidated Financial Results on page 3.

(3) For periods in which non-GAAP net income is generated, Non-GAAP Net Income (Loss) per share is calculated using diluted weighted average shares outstanding. For periods in which Non-GAAP Net Loss is generated, diluted weighted average shares outstanding is the same as basic weighted average shares outstanding.

Blucora Reconciliation of Trailing Twelve Month ("TTM") Adjusted EBITDA (1) (2)


	2019		2020								2021
(Unaudited, in thousands, rounding differences may exist)	TTM 4Q		TTM 1Q		TTM 2Q		TTM 3Q		TTM 4Q		TTM 1Q		TTM 2Q		TTM 3Q		TTM 4Q
Adjusted EBITDA (1) (2)
Net income (loss)	$	48,148	$	(329,516)	$	(310,907)	$	(274,727)	$	(342,755)	$	385	$	(17,652)	$	(19,249)	$	7,757
Stock-based compensation	16,300		12,656		12,478		12,356		10,066		16,877		18,133		18,345		20,754
Depreciation and amortization of acquired intangible assets	44,208		45,022		43,276		41,749		39,907		40,157		42,237		42,786		43,426
Interest expense and other, net	16,915		19,092		19,262		28,619		31,304		33,052		35,788		32,120		32,080
Acquisition and integration—Excluding change in the fair value of HKFS Contingent Consideration	25,763		29,648		23,289		27,806		22,785		18,906		22,751		12,016		10,398
Acquisition and integration—Change in the fair value of HKFS Contingent Consideration	—		—		—		(1,000)		8,300		14,600		26,100		28,800		22,400
Executive transition costs	—		9,184		9,820		10,225		10,701		1,517		881		476		—
Headquarter relocation costs	—		716		1,453		1,863		1,863		1,147		410		—		—
Contested proxy and other legal and consulting costs	—		—		—		—		—		3,230		5,695		7,293		10,939

Impairment of goodwill and an intangible asset	50,900		321,525		321,525		270,625		270,625		—		—		—		—
Income tax (benefit) expense	(65,054)		(1,519)		(52,934)		(25,347)		42,331		(23,489)		38,044		22,014		(9,218)
Adjusted EBITDA(1)	$	137,180	$	106,808	$	67,262	$	92,169	$	95,127	$	106,382	$	172,387	$	144,601	$	138,536

Blucora Net Leverage Ratio (1) (3) (4)


	2019			2020												2021
(Unaudited, in thousands, rounding differences may exist)	4Q			1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q
DEBT:
Senior Secured Credit Facility	$	399,687		$	444,375		$	389,062		$	563,609		$	563,156		$	562,703		$	562,250		$	561,797		$	561,344
CASH:
Cash and cash equivalents	80,820			168,198			90,081			151,166			150,125			191,803			232,409			184,926			134,824
NET DEBT (3)	$	318,867		$	276,177		$	298,981		$	412,443		$	413,031		$	370,900		$	329,841		$	376,871		$	426,520

Last twelve months:





ADJUSTED EBITDA (1) (2)	$	137,180		$	106,808		$	67,262		$	92,169		$	95,127		$	106,382		$	172,387		$	144,601		$	138,536

NET LEVERAGE RATIO (1) (3) (4)	2.3		x	2.6		x	4.4		x	4.5		x	4.3		x	3.5		x	1.9		x	2.6		x	3.1		x

____________________________

(1) Non-GAAP measure using Adjusted EBITDA for the last twelve months. Adjusted EBITDA for the trailing twelve month period is reconciled to the nearest comparable GAAP measure, net income (loss).

(2) For additional information on Adjusted EBITDA and its use as a non-GAAP measure, see page 6.

(3) We define Net Debt, a non-GAAP financial measure, as the outstanding principal of debt less cash and cash equivalents. 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 our debt.

(4) Net leverage ratio is calculated by dividing net debt by Adjusted EBITDA for the trailing twelve months.

Blucora Reconciliation of Operating Free Cash Flow (1)


	2019		2020										2021
(Unaudited, 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 by (used in) operating activities	$	92,804	$	46,864	$	(12,490)	$	940	$	8,765	$	44,079	$	53,722	$	43,549	$	(22,880)	$	(37,560)	$	36,831
Purchases of property, equipment, and software	(10,501)		(7,715)		(11,357)		(9,639)		(7,291)		(36,002)		(8,598)		(4,946)		(8,080)		(8,652)		(30,276)
Operating Free Cash Flow	$	82,303	$	39,149	$	(23,847)	$	(8,699)	$	1,474	$	8,077	$	45,124	$	38,603	$	(30,960)	$	(46,212)	$	6,555

____________________________

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

Blucora Operating Metrics - Wealth Management


	2019			2020															2021
(In thousands, rounding differences may exist)	FY 12/31			1Q			2Q			3Q			4Q			FY 12/31			1Q			2Q			3Q			4Q			FY 12/31
Segment revenue	$	507,979		$	144,989		$	115,884		$	135,932		$	149,384		$	546,189		$	154,491		$	162,395		$	169,135		$	172,192		$	658,213
Less: Financial professional commission payout	(348,003)			(100,804)			(82,656)			(94,794)			(102,610)			(380,864)			(107,211)			(112,164)			(119,044)			(119,609)			(458,028)
Segment net revenue (1)	$	159,976		$	44,185		$	33,228		$	41,138		$	46,774		$	165,325		$	47,280		$	50,231		$	50,091		$	52,583		$	200,185
Segment operating income (2)	$	68,292		$	22,598		$	11,731		$	17,498		$	20,368		$	72,195		$	19,396		$	21,396		$	19,564		$	21,856		$	82,212
Segment operating income as a % of revenue	13		%	16		%	10		%	13		%	14		%	13		%	13		%	13		%	12		%	13		%	12		%
Segment operating income as a % of net revenue	43		%	51		%	35		%	43		%	44		%	44		%	41		%	43		%	39		%	42		%	41		%


(In thousands, rounding differences may exist)			2019			2020															2021
	Sources of Revenue	Primary Drivers	FY 12/31			1Q			2Q			3Q			4Q			FY 12/31			1Q			2Q			3Q			4Q			FY 12/31
Financial professional-driven	Advisory	- Advisory asset levels	$	252,367		$	78,757		$	66,303		$	82,612		$	87,079		$	314,751		$	91,119		$	96,508		$	103,540		$	104,633		$	395,800
	Commission	- Transactions - Asset levels - Product mix	191,050			50,580			39,836			44,921			49,864			185,201			52,534			51,702			52,961			53,480			210,677
Other revenue	Asset-based	- Cash balances - Interest rates - Number of accounts - Client asset levels	48,182			10,579			3,981			4,351			4,777			23,688			5,329			5,526			5,659			5,587			22,101
	Transaction and fee	- Account activity - Number of clients - Number of financial professionals - Number of accounts	16,380			5,073			5,764			4,048			7,664			22,549			5,509			8,659			6,975			8,492			29,635
	Total revenue		$	507,979		$	144,989		$	115,884		$	135,932		$	149,384		$	546,189		$	154,491		$	162,395		$	169,135		$	172,192		$	658,213
	Total recurring revenue (3)		$	422,128		$	119,255		$	100,004		$	117,822		$	127,863		$	464,944		$	130,755		$	138,900		$	145,311		$	144,728		$	559,694
	Recurring revenue rate (3)		83.1		%	82.3		%	86.3		%	86.7		%	85.6		%	85.1		%	84.6		%	85.5		%	85.9		%	84.1		%	85.0		%

____________________________

(1) Non-GAAP financial measure represents segment revenue less financial professional commission payout.

(2) We do not allocate certain operating expenses (including personnel and overhead costs), stock-based compensation, acquisition and integration costs, depreciation, amortization of acquired intangible assets, executive transition costs, headquarters relocation costs, contested proxy and other legal and consulting costs, impairment of goodwill and an intangible asset, interest expense and other, net, or income taxes to the reportable segments.

(3) Recurring revenue consists of advisory fees, trailing commissions, fees from cash sweep programs, and certain transaction and fee revenue.

Blucora Operating Metrics - Wealth Management (continued)


(In thousands, rounding differences may exist)	2019			2020															2021
	FY 12/31			1Q			2Q			3Q			4Q			FY 12/31			1Q			2Q			3Q			4Q			FY 12/31
Total client assets	$	70,644,385		$	61,014,454		$	68,519,998		$	76,152,721		$	82,961,244		$	82,961,244		$	84,776,191		$	87,814,790		$	86,647,743		$	89,086,032		$	89,086,032
Brokerage assets	$	43,015,221		$	37,395,490		$	41,964,610		$	43,733,735		$	47,357,687		$	47,357,687		$	48,001,320		$	48,373,805		$	46,850,354		$	46,906,981		$	46,906,981
Advisory assets	$	27,629,164		$	23,618,964		$	26,555,388		$	32,418,986		$	35,603,557		$	35,603,557		$	36,774,871		$	39,440,985		$	39,797,389		$	42,179,051		$	42,179,051
% of total client assets	39.1		%	38.7		%	38.8		%	42.6		%	42.9		%	42.9		%	43.4		%	44.9		%	45.9		%	47.3		%	47.3		%
Number of financial professionals (in ones) (1)	3,984			3,945			3,862			3,975			3,770			3,770			3,718			3,606			3,529			3,416			3,416
Advisory and commission revenue per financial professional (2)	$	111.3		$	32.8		$	27.5		$	32.1		$	36.3		$	132.6		$	38.6		$	41.1		$	44.3		$	46.3		$	177.5

Quarterly production retention rate: (3)
TTM Financial professional-driven revenue (4)	$	443,417		$	495,837		$	492,498		$	491,829		$	499,952		$	499,952		$	514,268		$	556,339		$	585,307		$	606,477		$	606,477
TTM Financial professional-driven revenue related to independent financial professionals who departed in the quarter (4)	$	10,770		$	4,586		$	11,445		$	5,366		$	19,101		$	19,101		$	8,127		$	9,881		$	12,157		$	11,079		$	11,079
TTM Financial professional-driven revenue, less that related to independent financial professionals who departed in the quarter (4)	$	432,647		$	491,251		$	481,053		$	486,463		$	480,851		$	480,851		$	506,141		$	546,458		$	573,150		$	595,398		$	595,398
Quarterly production retention rate (3)	97.6		%	99.1		%	97.7		%	98.9		%	96.2		%	96.2		%	98.4		%	98.2		%	97.9		%	98.2		%	98.2		%

____________________________

(1) The increase in financial professionals in the third quarter of 2020 resulted from the addition of 19 in-house financial professionals (licensed financial planning consultants, which were employees of Avantax Planning Partners) and 131 licensed referring representatives at CPA firms that partner with Avantax Planning Partners.

(2) Advisory and commission revenue per financial professional is based upon a full year of advisory and commission revenue.

(3) Quarterly production retention rate is a non-GAAP financial measure. We believe quarterly production retention rate is an important measure of our quarterly retention of financial professional-driven revenue (which consists of advisory revenue and commission revenue). Management uses quarterly production retention rate to measure the impact of financial professional departures on our business. Quarterly production retention rate is calculated by dividing (x) the difference of (i) total financial professional-driven revenue for the trailing-twelve-month period then ended minus (ii) financial professional-driven revenue for the trailing-twelve-month period then ended related to independent financial professionals that departed in the quarter by (y) total financial professional-driven revenue for the trailing-twelve-month period then ended. As quarterly production retention rate is a measure of retention during a quarter, it also includes quarterly production from independent financial professionals who departed in prior quarters in the trailing-twelve-month period, and therefore does not show production retention rate over longer periods of time.

(4) For the trailing-twelve-month period then ended.

Blucora Operating Metrics - Tax Software


(In thousands except % and as otherwise indicated, rounding differences may exist)	Year ended December 31,		Change
	2021	2020	Units	%
Total e-files (1)	5,583	5,319	264	5	%
Consumers
E-files (1)	3,178	3,178	—	—	%
Professional
E-files	2,405	2,141	264	12	%
Units sold (in ones)	20,901	20,360	541	3	%
E-files per unit sold (in ones)	115.1	105.2	9.9	9	%

____________________________

(1)We participate in the Free File Alliance that is part of an IRS partnership that provides free electronic tax filing services to taxpayers meeting certain income-based guidelines. Free File Alliance e-files are included within total e-files and consumer e-files above.