GlobeNewswire Inc | Feb 17, 2021 06:30AM EST

February 17, 2021

DALLAS, Feb. 17, 2021 (GLOBE NEWSWIRE) -- 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 December31, 2020.

2020 Highlights and Recent Developments

-- Increased total revenue by 5% year-over-year, to $755 million, including the addition of HK Financial Services (HKFS), on July 1 -- Recorded 23rd consecutive year of segment revenue growth at TaxAct, excluding sale of SimpleTax -- Completed acquisition of HKFS, now rebranded as Avantax Planning Partners (APP), adding a historically fast growing, highly profitable registered investment advisor (RIA) and its fee-based advisory assets to the Companys wealth management business -- Increased advisory assets 29% year-over-year, including the addition of approximately $5.0 billion in APP assets -- Increased total client assets 17% to $83.0 billion, with $35.6 billion or 42.9% in advisory assets -- Further strengthened Board of Directors with appointments of Karthik Rao, Jana Schreuder and Mark Ernst

After an unprecedented year, I am extremely proud of our teams focus and execution of our business plan in 2020, said Chris Walters, Blucoras President and Chief Executive Officer. During the past year our new leadership team has made tremendous progress implementing our differentiated, tax-focused strategy, repositioning both Avantax and TaxAct for sustainable growth and moving forward with new plans to realize significant synergy potential between the two business units. Based on the progress and investments we made during 2020, I am optimistic about 2021 and beyond, as we execute on our plans to drive long-term earnings growth and shareholder value.

Summary Financial Performance: Q4 and Full Year 2020($ in millions except per share amounts)

Q4 Q4 Full Year Full Year 2020 2019 Change 2020 2019 ChangeRevenue Wealth $ 149.4 $ 145.2 3 % $ 546.2 $ 508.0 8 %ManagementTax Preparation $ 5.8 $ 4.2 38 % $ 208.8 $ 210.0 (1 ) %Total Revenue $ 155.2 $ 149.4 4 % $ 755.0 $ 717.9 5 %SegmentOperating Income (Loss):Wealth $ 20.4 $ 19.1 7 % $ 72.2 $ 68.3 6 %ManagementTax Preparation $ (11.0 ) $ (12.3 ) 11 % $ 49.6 $ 96.2 (48 ) %Total SegmentOperating $ 9.3 $ 6.8 37 % $ 121.8 $ 164.5 (26 ) %IncomeUnallocatedCorporate-LevelGeneral and $ 7.1 $ 7.6 (7 ) % $ 26.7 $ 27.4 (3 ) %AdministrativeExpensesGAAP: Operating Loss $ (23.7 ) $ (26.0 ) 9 % $ (269.1 ) $ ? N/ANet Income(Loss) $ (50.7 ) $ 17.3 (393 ) % $ (342.8 ) $ 48.1 (813 ) %Attributable toBlucora. Inc.Diluted NetIncome (Loss)Per Share $ (1.05 ) $ 0.36 (392 ) % $ (7.14 ) $ 0.98 (829 ) %Attributable toBlucora. Inc.Non-GAAP: (1) Adjusted EBITDA $ 2.2 $ (0.7 ) 414 % $ 95.1 $ 137.2 (31 ) %Net Income $ (9.0 ) $ (4.8 ) (88 ) % $ 54.1 $ 104.2 (48 ) %(Loss)Diluted NetIncome (Loss) $ (0.19 ) $ (0.10 ) (90 ) % $ 1.12 $ 2.11 (47 ) %per Share (EPS)

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

2020 Results vs. Prior Guidance

($ in millions except per share amounts) Prior Guidance ActualWealth Management Revenue (1) $535.5 - $540.5 $ 546.2 Tax Preparation Revenue $207.0 - $208.0 $ 208.8 Total Revenue $742.5 - $748.5 $ 755.0 Wealth Management Segment Operating Income (1) $68.5 - $70.5 $ 72.2 Tax Preparation Segment Operating Income $47.5 - $48.5 $ 49.6 Unallocated Corporate-Level General and $27.5 - $26.5 $ 26.7 Administrative Expenses GAAP: Net Loss (1) $(339.0) ? $ $ (342.8 ) (333.0)Net Loss per share (1) $(7.05) ? $ $ (7.14 ) (6.94) Non-GAAP: Adjusted EBITDA (1) (2) $88.5 - $92.5 $ 95.1 Non-GAAP Net Income (1) (2) $46.0 - $51.0 $ 54.1 Non-GAAP Net Income per share (1) (2) $0.95 - $1.05 $ 1.12

_________________________ (1)Includes HKFS results from July 1, 2020 to December 31, 2020.(2)See reconciliations of all non-GAAP to GAAP measures presented in this release in the tables below.

Tax Season Update

With the IRS delaying the official beginning of tax season to February 12, our tax season has only just begun. Regardless, I feel confident about the actions we have taken this season as well as the mid to long-term benefits of the investments we made in 2020 to further improve the customer experience, Walters continued. We have now launched our online-assisted offering to meet a significant need that has emerged in the marketplace. We have also refined our marketing to efficiently add paid customers, all while reinforcing our differentiated value position with a compelling offering. We expect these initiatives to contribute to the financial improvements we shared for this year as well as strong financial results in the mid- to long-term.

Outlook

Given the delayed start of the tax season, the Company is not providing updated first quarter guidance for the Tax Preparation segment but rather reaffirming full year guidance of low single digit revenue growth and a minimum of $20 million of additional segment operating income relative to 2020. For the Wealth Management segment in the first quarter of 2021, the Company expects revenues of between $150 million and $155.5 million and segment operating income of between $17.0 million and $19.5 million. The Company also expects corporate unallocated expenses to be between $7.5 and $8.5 million in the period.

Conference Call and Webcast

A conference call and live webcast will be held today at 8:30a.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 supplemental financial information to our results on the Investor Relations section of the Blucora corporate website at 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, a provider of data and technology-driven solutions that empower people to improve their financial wellness. Blucora operates in two segments including (i) wealth management, through its Avantax Wealth Management brand, with a collective $83 billion in total client assets as of December31, 2020, and (ii) tax preparation, through its TaxAct business, a market leader in tax preparation software with approximately 3 million consumer and more than 23,000 professional users in 2020. 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) 870-6463IR@blucora.com

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section21E 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 are intended to identify forward-looking statements. Actual results may differ significantly from managements 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 our 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 Risk Factors section of the Form 10-K and Form 10-Q that we most recently filed 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 required by law. In addition, the Company has not filed its Form 10-K for the year ended December 31, 2020. 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 Years Ended December 31, December 31, 2020 2019 2020 2019Revenue: Wealth management $ 149,384 $ 145,188 $ 546,189 $ 507,979 services revenueTax preparation services 5,773 4,233 208,763 209,966 revenueTotal revenue 155,157 149,421 754,952 717,945 Operating expenses: Cost of revenue: Wealth management 103,630 101,200 385,962 352,081 services cost of revenueTax preparation services 2,569 1,708 12,328 10,691 cost of revenueTotal cost of revenue 106,199 102,908 398,290 362,772 Engineering and 5,359 8,608 27,258 30,931 technologySales and marketing 26,833 21,401 177,618 126,205 General and 18,625 22,808 82,158 78,529 administrativeAcquisition and 12,303 8,024 31,085 25,763 integrationDepreciation 1,948 1,633 7,293 5,479 Amortization of otheracquired intangible 7,578 10,062 29,745 37,357 assetsImpairment of goodwill ? ? 270,625 50,900 and an intangible assetTotal operating expenses 178,845 175,444 1,024,072 717,936 Operating income (loss) (23,688 ) (26,023 ) (269,120 ) 9 Other loss, net (1) (7,918 ) (5,233 ) (31,304 ) (16,915 )Loss before income taxes (31,606 ) (31,256 ) (300,424 ) (16,906 )Income tax benefit (19,094 ) 48,584 (42,331 ) 65,054 (expense)Net income (loss)attributable to Blucora, $ (50,700 ) $ 17,328 $ (342,755 ) $ 48,148 Inc.Net income (loss) pershare attributable to Blucora, Inc.:Basic $ (1.05 ) $ 0.36 $ (7.14 ) $ 1.00 Diluted $ (1.05 ) $ 0.36 $ (7.14 ) $ 0.98 Weighted average shares outstanding:Basic 48,107 47,689 47,978 48,264 Diluted 48,107 48,344 47,978 49,282

____________________________ (1)Other loss, net consisted of the following (in thousands):

Three Months Ended Years Ended December December 31, 31, 2020 2019 2020 2019Interest expense $ 7,160 $ 5,002 $ 24,570 $ 19,017 Amortization of debt 366 194 1,372 1,042 issuance costsAccretion of debt discounts 279 39 693 228 Total interest expense 7,805 5,235 26,635 20,287 Interest income (38 ) (108 ) (65 ) (449 )Gain on sale of a business ? ? (349 ) (3,256 )Non-capitalized debt ? ? 3,687 ? issuance expensesOther 151 106 1,396 333 Other loss, net $ 7,918 $ 5,233 $ 31,304 $ 16,915

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

December 31, 2020 2019ASSETS Current assets: Cash and cash equivalents $ 150,125 $ 80,820 Cash segregated under federal or other 637 5,630 regulationsAccounts receivable, net of allowance 12,736 16,266 Commissions receivable 26,132 21,176 Other receivables 717 2,902 Prepaid expenses and other current assets, net 10,321 12,349 Total current assets 200,668 139,143 Long-term assets: Property and equipment, net 58,500 18,706 Right-of-use assets, net 23,455 10,151 Goodwill, net 454,821 662,375 Other intangible assets, net 322,179 290,211 Deferred tax asset, net ? 9,997 Other long-term assets 4,569 6,989 Total long-term assets 863,524 998,429 Total assets $ 1,064,192 $ 1,137,572 LIABILITIES AND STOCKHOLDERS? EQUITY Current liabilities: Accounts payable $ 9,290 $ 10,969 Commissions and advisory fees payable 19,021 19,905 Accrued expenses and other current liabilities 56,419 36,144 Deferred revenue?current 12,298 12,014 Lease liabilities?current 2,304 3,272 Current portion of long-term debt, net 1,784 11,228 Total current liabilities 101,116 93,532 Long-term liabilities: Long-term debt, net 552,553 381,485 Deferred tax liability, net 30,663 ? Deferred revenue?long-term 6,247 7,172 Lease liabilities?long-term 36,404 5,916 Other long-term liabilities 24,919 5,952 Total long-term liabilities 650,786 400,525 Total liabilities 751,902 494,057 Stockholders? equity: Common stock, par $0.0001?900,000 authorizedshares; 49,483 shares issued and 48,177 sharesoutstanding at December31, 2020; 49,059 shares 5 5 issued and 47,753 shares outstanding atDecember31, 2019Additional paid-in capital 1,598,230 1,586,972 Accumulated deficit (1,257,546 ) (914,791 )Accumulated other comprehensive income (loss) ? (272 )Treasury stock, at cost?1,306 shares at (28,399 ) (28,399 )December31, 2020 and December31, 2019Total stockholders? equity 312,290 643,515 Total liabilities and stockholders? equity $ 1,064,192 $ 1,137,572

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

Years Ended December 31, 2020 2019Operating activities: Net income (loss) $ (342,755 ) $ 48,148 Adjustments to reconcile net income (loss) to net cash from operating activities:Stock-based compensation 10,066 16,300 Depreciation and amortization of acquired intangible 39,907 44,208 assetsImpairment of goodwill and an intangible asset 270,625 50,900 Reduction of right-of-use lease assets 8,908 4,425 Deferred income taxes 41,059 (67,549 )Amortization of debt issuance costs 1,372 1,042 Accretion of debt discounts 693 228 Gain on sale of a business (349 ) (3,256 )Change in fair value of acquisition-related contingent 8,300 ? consideration liabilityAccretion of lease liability 1,922 599 Other 1,508 135 Cash provided (used) by changes in operating assets and liabilities:Accounts receivable 10,705 871 Commissions and advisory fees receivable (4,956 ) (471 )Other receivables 2,185 4,506 Prepaid expenses and other current assets 1,662 10,537 Other long-term assets 2,232 3,377 Accounts payable (4,192 ) 29 Commissions and advisory fees payable (884 ) 432 Lease liabilities (3,894 ) (7,335 )Deferred revenue (796 ) (17,367 )Accrued expenses and other current and long-term 761 3,045 liabilitiesNet cash provided by operating activities 44,079 92,804 Investing activities: Business acquisition, net of cash acquired (101,910 ) (166,560 )Purchases of property and equipment (36,002 ) (10,501 )Proceeds from sale of a business, net of cash 349 7,467 Acquisition of customer relationships (3,143 ) ? Net cash used by investing activities (140,706 ) (169,594 )Financing activities: Proceeds from credit facilities, net of debt issuance 226,278 131,489 costs and debt discountPayments on credit facilities (66,531 ) (313 )Stock repurchases ? (28,399 )Payment of redeemable noncontrolling interests ? (24,945 )Proceeds from stock option exercises 97 4,387 Proceeds from issuance of stock through employee stock 2,258 2,212 purchase planTax payments from shares withheld for equity awards (1,163 ) (5,652 )Contingent consideration payments for business ? (943 )acquisitionNet cash provided by financing activities 160,939 77,836 Effect of exchange rate changes on cash, cash ? 38 equivalents, and restricted cashNet increase in cash, cash equivalents, and restricted 64,312 1,084 cashCash, cash equivalents, and restricted cash, beginning 86,450 85,366 of periodCash, cash equivalents, and restricted cash, end of $ 150,762 $ 86,450 period

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

Three Months Ended December Years Ended December 31, 31, 2020 2019 2020 2019Revenue: Wealth Management $ 149,384 $ 145,188 $ 546,189 $ 507,979 (1)Tax Preparation 5,773 4,233 208,763 209,966 (1)Total revenue 155,157 149,421 754,952 717,945 Operating income (loss):Wealth Management 20,368 19,142 72,195 68,292 Tax Preparation (11,025 ) (12,316 ) 49,621 96,249 Corporate-level (33,031 ) (32,849 ) (390,936 ) (164,532 )activity (2)Total operating (23,688 ) (26,023 ) (269,120 ) 9 income (loss)Other loss, net (7,918 ) (5,233 ) (31,304 ) (16,915 )Income tax (19,094 ) 48,584 (42,331 ) 65,054 benefit (expense)Net income (loss)attributable to $ (50,700 ) $ 17,328 $ (342,755 ) $ 48,148 Blucora, Inc.

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

Three Months Ended December Years Ended December 31, 31, 2020 2019 2020 2019Wealth Management: Advisory $ 87,079 $ 75,621 $ 314,751 $ 252,367 Commission 49,864 53,199 185,201 191,050 Asset-based 4,777 11,652 23,688 48,182 Transaction and 7,664 4,716 22,549 16,380 feeTotal Wealth $ 149,384 $ 145,188 $ 546,189 $ 507,979 Management revenueTax Preparation: Consumer $ 5,502 $ 4,096 $ 192,226 $ 195,004 Professional 271 137 16,537 14,962 Total TaxPreparation $ 5,773 $ 4,233 $ 208,763 $ 209,966 revenue

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

Three Months Ended Years Ended December 31, December 31, 2020 2019 2020 2019General and administrative $ 7,118 $ 7,559 $ 26,689 $ 27,361 expensesStock-based compensation 2,846 5,136 10,066 16,300 Acquisition and integration 12,303 8,024 31,085 25,763 costsDepreciation 2,710 2,068 10,162 6,851 Amortization of acquired 7,578 10,062 29,745 37,357 intangible assetsImpairment of goodwill and ? ? 270,625 50,900 an intangible assetExecutive transition costs 476 ? 10,701 ? Headquarters relocation ? ? 1,863 ? costsTotal corporate-level $ 33,031 $ 32,849 $ 390,936 $ 164,532 activity

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 Years Ended December 31, December 31, 2020 2019 2020 2019Net income attributable $ (50,700 ) $ 17,328 $ (342,755 ) $ 48,148 to Blucora, Inc. (2)Stock-based compensation 2,846 5,136 10,066 16,300 Depreciation andamortization of acquired 10,288 12,130 39,907 44,208 intangible assetsOther loss, net 7,918 5,233 31,304 16,915 Acquisition andintegration?Excl. Changein fair value of 3,003 8,024 22,785 25,763 acquisition-relatedcontingent considerationAcquisition andintegration?Change infair value of 9,300 ? 8,300 ? acquisition-relatedcontingent considerationImpairment of goodwill ? ? 270,625 50,900 and an intangible assetExecutive transition 476 ? 10,701 ? costsHeadquarters relocation ? ? 1,863 ? costsIncome tax (benefit) 19,094 (48,584 ) 42,331 (65,054 )expenseAdjusted EBITDA $ 2,225 $ (733 ) $ 95,127 $ 137,180

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

Three Months Ended Years Ended December 31, December 31, 2020 2019 2020 2019Net income (loss)attributable to Blucora, $ (50,700 ) $ 17,328 $ (342,755 ) $ 48,148 Inc. (2)Stock-based compensation 2,846 5,136 10,066 16,300 Amortization of acquired 7,578 10,062 29,745 37,357 intangible assetsImpairment of goodwill ? ? 270,625 50,900 and an intangible assetGain on the sale of a ? ? (349 ) (3,256 )businessAcquisition andintegration?Excl. Changein fair value of 3,003 8,024 22,785 25,763 acquisition-relatedcontingent considerationAcquisition andintegration?Change infair value of 9,300 ? 8,300 ? acquisition-relatedcontingent considerationExecutive transition 476 ? 10,701 ? costsHeadquarters relocation ? ? 1,863 ? costsNon-capitalized debt ? ? 3,687 ? issuance costsCash tax impact ofadjustments to GAAP net (234 ) (504 ) (1,647 ) (2,396 )incomeNon-cash income tax 18,732 (44,859 ) 41,059 (68,618 )(benefit) expenseNon-GAAP net income $ (8,999 ) $ (4,813 ) $ 54,080 $ 104,198 (loss)Per diluted share: Net income (loss)attributable to Blucora, $ (1.05 ) $ 0.36 $ (7.10 ) $ 0.98 Inc. (2) (3)Stock-based compensation 0.06 0.11 0.21 0.33 Amortization of acquired 0.15 0.21 0.61 0.76 intangible assetsImpairment of goodwill ? ? 5.61 1.03 and an intangible assetGain on sale of a ? ? (0.01 ) (0.07 )businessAcquisition andintegration?Excl. Changein fair value of 0.06 0.17 0.47 0.52 acquisition-relatedcontingent considerationAcquisition andintegration?Change infair value of 0.19 ? 0.17 ? acquisition-relatedcontingent considerationExecutive transition 0.01 ? 0.22 ? costsHeadquarters relocation ? ? 0.04 ? costsNon-capitalized debt ? ? 0.08 ? issuance costsCash tax impact ofadjustments to GAAP net ? (0.01 ) (0.03 ) (0.05 )incomeNon-cash income tax 0.39 (0.94 ) 0.85 (1.39 )(benefit) expenseNon-GAAP net income $ (0.19 ) $ (0.10 ) $ 1.12 $ 2.11 (loss) per shareWeighted average sharesoutstanding used in 48,107 47,689 48,244 49,282 calculating Non-GAAP netincome per share

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

Rangesfortheyear ending December 31, 2020 Low HighNet income attributable to Blucora, Inc. $ (339,000 ) $ (333,000 )Stock-based compensation 11,900 11,800 Depreciation and amortization of acquired 40,800 40,500 intangible assetsOther loss, net 31,700 31,200 Acquisition, integration, executive transition, 40,900 40,600 and headquarters relocation costsImpairment of goodwill 270,600 270,600 Income tax expense 31,600 30,800 Adjusted EBITDA $ 88,500 $ 92,500

Non-GAAP Income and Non-GAAP Net Income Per Share Reconciliation for Prior Guidance (1)(Amounts in thousands, except per share amounts)

Rangesfortheyearended December 31, 2020 Low HighNet loss attributable to Blucora, Inc. $ (339,000 ) $ (333,000 )Stock-based compensation 11,900 11,800 Amortization of acquired intangible assets 30,000 29,900 Acquisition, integration, executive transition, and 40,900 40,600 headquarters relocation costsDebt issuance expenses 3,700 3,700 Impairment of goodwill 270,600 270,600 Gain on sale of a business (300 ) (300 )Cash tax impact of adjustments to net loss (1,900 ) (1,800 )Non-cash income tax expense 30,100 29,500 Non-GAAP net income $ 46,000 $ 51,000 Per diluted share: Net loss attributable to Blucora, Inc. (3) $ (6.98 ) $ (6.87 )Stock-based compensation 0.24 0.24 Amortization of acquired intangible assets 0.62 0.62 Acquisition, integration, executive transition, and 0.84 0.84 headquarters relocation costsDebt issuance expenses 0.08 0.08 Impairment of goodwill 5.57 5.58 Gain on sale of a business ? ? Cash tax impact of adjustments to net loss (0.04 ) (0.04 )Non-cash income tax expense 0.62 0.60 Non-GAAP net income per share $ 0.95 $ 1.05 Weighted average shares outstanding used in 48,600 48,500 calculating Non-GAAP net income per share

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, other loss, net, acquisition and integration costs, impairment of goodwill and an intangible asset, executive transition costs, headquarters relocation costs, and income tax (benefit) expense. Acquisition and integration costs primarily relate to the 1st Global Acquisition and the HKFS Acquisition. Impairment of goodwill relates to the impairment of our Wealth Management reporting unit goodwill that was recognized in the first quarter of 2020. Impairment of an intangible asset relates to the impairment of the HD Vest trade name intangible asset following the rebranding of the Wealth Management business in the third quarter of 2019. Executive transition costs relate to the departure of certain Company executives primarily in the first quarter of 2020. Headquarters relocation costs relate to the process of moving from our original Dallas office and Irving office 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) attributable to Blucora, Inc., determined in accordance with GAAP, excluding the effects of stock-based compensation, amortization of acquired intangible assets (including acquired technology), impairment of goodwill and an intangible asset, gain on the sale of a business, acquisition and integration costs, executive transition costs, headquarters relocation costs, non-capitalized debt issuance expenses, 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 unutilized, between 2021 and 2024. Gain on the sale of a business relates to the disposition of SimpleTax in the third quarter of 2019 and the subsequent working capital adjustment in the third quarter of 2020. Non-capitalized debt issuance expense relates to the expense recognized as a result of the increase to our term loan 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 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) Any difference in the per diluted share amounts between this table and the Preliminary Condensed Consolidated Statements of Operations is due to using different weighted average shares outstanding in the event that there is GAAP net loss but non-GAAP net income and vice versa.

Blucora, Inc.Reconciliation of a Non-GAAP Financial Measure to the Nearest GAAP Measure

Reconciliation of Tax Preparation Services Revenue, Excluding SimpleTax, to Tax Preparation Services Revenue (1)

Years ended December 31, 2020 2019 2018 2017 2016 2015Tax preparationservices $ 208,763 $ 209,966 $ 187,282 $ 160,937 $ 139,365 $ 117,708 revenue (2)Less: SimpleTax ? (2,555 ) (1,800 ) (1,224 ) (1,226 ) (21 )revenue (3)Tax preparationservicesrevenue, $ 208,763 $ 207,411 $ 185,482 $ 159,713 $ 138,139 $ 117,687 excludingSimpleTax (1)

____________________________ (1) We define tax preparation services revenue, excluding SimpleTax (which is a non-GAAP measure), as tax preparation services revenue (as presented on the consolidated statements of comprehensive income) less SimpleTax revenue. We believe tax preparation services revenue, excluding SimpleTax, is an important measure of current and historical sources of revenue for the Tax Preparation segment since Blucora disposed of SimpleTax in the third quarter of 2019.(2) As presented in the Blucora consolidated statements of comprehensive income.(3) We acquire SimpleTax Software, Inc. (SimpleTax) in July 2015 and disposed of SimpleTax in September 2019.