AP NEWS
Press release content from Globe Newswire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

Blucora Announces Third Quarter 2019 Results

November 6, 2019 GMT

IRVING, Texas, Nov. 06, 2019 (GLOBE NEWSWIRE) -- Blucora, Inc. (NASDAQ: BCOR), a leading provider of tax-smart financial solutions that empower people’s goals, today announced financial results for the third quarter ended September 30, 2019.

Third Quarter Highlights and Recent Developments

-- Increased total revenue by 56% year-over-year (y/y), including addition of 1st Global for full quarter -- Legacy HD Vest advisory assets increased 9% y/y, legacy 1st Global advisory assets increased 16% y/y -- Total Client Assets ended the quarter at $67.7 billion, with $26.3 billion, or 39% in Advisory Assets -- Integration of legacy wealth management businesses running better than plan; Completed consolidation on the same clearing platform ahead of schedule, and unified both under new brand, Avantax Wealth Management -- Repurchased more than 560,000 shares of common stock, or 1.1% of outstanding shares - first under current authorization

“In our first full quarter since the acquisition of 1st Global, I’m pleased to report solid quarterly results as well as an integration that is now running ahead of plan,” said John Clendening, Blucora’s President and Chief Executive Officer. “Integration synergy capture is running strong in the short-term, and the early consolidation of our legacy wealth management businesses from a clearing platform perspective, should allow for additional synergy capture over the long-term. I’m also excited to announce that we have unified our legacy wealth management brands, HD Vest and 1st Global, under a powerful new brand, Avantax Wealth Management, as we aim to redefine what tax-smart wealth management means and provide superior results for our clients.”

Summary Financial Performance: Q3 2019 ($ in millions except per share amounts)

Q3 Q3 2019 2018 Change Revenue: Wealth Management $ 145.4 $ 91.9 58 % Tax Preparation $ 3.6 $ 3.5 3 % Total Revenue $ 149.0 $ 95.4 56 % Segment Income: Wealth Management $ 20.6 $ 12.9 60 % Tax Preparation $ (12.1 ) $ (6.9 ) 74 % Total Segment Income $ 8.6 $ 6.0 44 % Unallocated Corporate Operating Expenses $ (6.5 ) $ (4.6 ) 42 % GAAP: Operating Loss $ (72.1 ) $ (10.7 ) 574 % Net Loss Attributable to Blucora, Inc. $ (62.4 ) $ (14.0 ) 347 % Diluted Net Loss Per Share Attributable to Blucora, Inc. (EPS) $ (1.28 ) $ (0.37 ) 246 % Non-GAAP*: Adjusted EBITDA* $ 2.1 $ 1.4 50 % Net Loss* $ (9.6 ) $ (4.4 ) 116 % Diluted Net Loss Per Share (EPS)* $ (0.20 ) $ (0.09 ) 122 % * See reconciliations of all non-GAAP to GAAP measures presented in this release in the tables below.

Third Quarter Results vs. Prior Guidance Differe $ in millions Prior Guidance MidpointActual nce at Midpoin t Wealth Management Revenue $139.0 - $145.5 142.3 145.4 3.2 TaxAct Revenue $3.5 – $4.0 3.8 3.6** (0.2 ) Total Revenue $142.5 - $149.5 146.0 149.0 3.0 Wealth Management Segment Income $18.5 - $21.5 20 20.6 0.6 TaxAct Segment Income ($13.5) - ($14.0) (13.8 ) (12.0 ) 1.7 Corporate Unallocated Operating Expenses $8.0 - $8.5 8.3 6.5 1.8 Adjusted EBITDA $0.0 - ($4.0) (2.0 ) 2.1 4.1 **Includes an immaterial adjustment to previously recognized revenue. The adjustment is expected to reverse in 1Q’2020.

Full Year 2019 OutlookThe company has updated its full-year 2019 outlook to reflect current business conditions, including the clearing consolidation occurring ahead of schedule, a 25 basis-point change in the Federal Funds target rate and other items.

Differen $ in millions Prior Guidance Current Outlook ce at Midpoint Wealth Management Revenue $500.0 - $513.0 $505.0 - $510.0 1.0 TaxAct Revenue $210.0 - $211.0 $209.5 - $210.5 (0.5 ) Total Revenue $710.0 - $724.0 $714.5 - $720.5 0.5 Wealth Management Segment Income $67.0 - $73.5 $67.0 - $69.5 (2.0 ) TaxAct Segment Income $93.0 - $94.5 $93.0 - $94.5 - Corporate Unallocated Operating Expense $28.5 - $29.5 $28.5 - $29.5 - Adjusted EBITDA* $130.5 - $139.5 $130.5 - $135.5 (2.0 ) Net Income $27.0 - $37.5 ($0.4) - ($5.4) (35.0 ) Net Income per share $0.54 - $0.75 ($0.01) - ($0.11) (0.67 ) Non-GAAP Net Income* $92.5 - $102.5 $93.5 - $99.5 (1.0 ) Non-GAAP Net Income per share* $1.84 - $2.04 $1.88 - $2.01 -

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 third quarter results, its outlook for the full year 2019 and other business matters. We will also provide the prepared remarks for the conference call along with supplemental financial information to our results on the Investor Relations section of the Blucora corporate website at http://www.blucora.com prior to the call. The supplemental financial information has also been filed with the SEC on Form 8-K. A replay of the call will be available on our website.

About Blucora® Blucora, Inc. (NASDAQ: BCOR) is on the forefront of financial technology, pioneering tax-smart financial solutions that empower people’s goals. Blucora operates in two segments including wealth management, through its Avantax Wealth Management (formerly operating under the HD Vest and 1st Global brands) businesses, the No. 1 tax-focused broker-dealer, with $67 billion in total client assets as of September 30, 2019, and tax preparation, through its TaxAct business, the No. 3 tax preparation software by market share with approximately 3 million consumer and professional users. With integrated tax and wealth management, Blucora is uniquely positioned to provide better long-term outcomes for customers with holistic, tax-advantaged solutions. For more information on Blucora, visit www.blucora.com.

Source: Blucora

Blucora Contact:

Bill Michalek (972) 870-6463

VP, Investor Relations

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. When used in this release, terms such as “believes,” “estimates,” “should,” “could,” “would,” “plans,” “expects,” “intends,” “anticipates,” “may,” “forecasts,” “projects” and similar expressions and variations as they relate to the Company or its management are intended to identify forward-looking statements. Actual results may differ significantly from management’s expectations due to various risks and uncertainties including, but not limited to: our ability to effectively implement our future business plans and growth strategy; our ability to effectively compete within our industry; our ability to attract and retain customers; our ability to realize all of the anticipated benefits of the acquisition of 1st Global, as well as our ability to integrate the operations of 1st Global; 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 attract and retain productive financial advisors; 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; our expectations concerning the benefits that may be derived from our clearing platform and our investment advisory platform; cybersecurity risks; our ability to maintain our relationships with third party partners; the seasonality of our business; litigation risks; our ability to attract and retain qualified employees; 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; our ability to protect our intellectual property; and our ability to effectively integrate other companies or assets that we may acquire. A more detailed description of these and certain other factors that could affect actual results is included in the Company’s filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of this report, except as may be required by law.

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

Three Months Ended Nine months ended September 30, September 30, 2019 2018 2019 2018 Revenue: Wealth management services revenue $ 145,428 $ 91,887 $ 362,791 $ 275,984 Tax preparation services revenue 3,588 3,498 205,733 183,214 Total revenue 149,016 95,385 568,524 459,198 Operating expenses: Cost of revenue: Wealth management services cost of revenue 102,030 62,313 250,881 187,526 Tax preparation services cost of revenue 1,633 1,370 8,983 8,182 Amortization of acquired technology — — — 99 Total cost of revenue (1) 103,663 63,683 259,864 195,807 Engineering and technology (1) 8,635 4,246 22,323 14,225 Sales and marketing(1) 19,976 15,675 104,804 94,719 General and administrative(1) 19,642 13,404 55,721 43,895 Acquisition and integration 6,759 — 17,739 — Depreciation 1,470 798 3,846 3,706 Amortization of other acquired intangible assets 10,082 8,271 27,295 25,384 Impairment of intangible asset 50,900 — 50,900 — Restructuring (1) — — — 291 Total operating expenses 221,127 106,077 542,492 378,027 Operating income (loss) (72,111 ) (10,692 ) 26,032 81,171 Other loss, net (2) (2,606 ) (3,863 ) (11,682 ) (11,850 ) Income (loss) before income taxes (74,717 ) (14,555 ) 14,350 69,321 Income tax benefit (expense) 12,331 818 16,470 (2,052 ) Net income (loss) (62,386 ) (13,737 ) 30,820 67,269 Net income attributable to noncontrolling interests — (227 ) — (654 ) Net income attributable to Blucora, Inc.: $ (62,386 ) $ (13,964 ) $ 30,820 $ 66,615 Net income (loss) per share attributable to Blucora, Inc.: Basic $ (1.28 ) $ (0.37 ) $ 0.64 $ 1.34 Diluted $ (1.28 ) $ (0.37 ) $ 0.62 $ 1.28 Weighted average shares outstanding: Basic 48,652 47,712 48,456 47,191 Diluted 48,652 47,712 49,596 49,292

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

Three Months Ended Nine months ended September 30, September 30, 2019 2018 2019 2018 Interest income $ (52 ) $ (119 ) $ (341 ) $ (217 ) Interest expense 5,469 3,744 14,015 11,772 Amortization of debt issuance costs 301 172 848 659 Accretion of debt discounts 66 38 189 125 Loss on debt extinguishment — — — 1,534 Gain on sale of a business (3,256 ) — (3,256 ) — Other 78 28 227 (2,023 ) Other loss, net $ 2,606 $ 3,863 $ 11,682 $ 11,850 - ----- - - ----- - - ------ - - ------ -

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

September 30, December 2019 31, 2018 ASSETS Current assets: Cash and cash equivalents $ 97,466 $ 84,524 Cash segregated under federal or other regulations 1,284 842 Accounts receivable, net of allowance 16,803 15,721 Commissions receivable 20,724 15,562 Other receivables 7,424 7,408 Prepaid expenses and other current assets, net 9,058 7,755 Total current assets 152,759 131,812 Long-term assets: Property and equipment, net 17,230 12,389 Right-of-use assets, net 10,199 — Goodwill, net 663,005 548,685 Other intangible assets, net 301,533 294,603 Other long-term assets 9,902 10,236 Total long-term assets 1,001,869 865,913 Total assets $ 1,154,628 $ 997,725 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 12,139 $ 3,798 Commissions and advisory fees payable 18,871 15,199 Accrued expenses and other current liabilities 39,261 18,980 Lease liabilities 4,163 46 Deferred revenue 7,456 10,257 Current portion of long-term debt, net 1,227 — Total current liabilities 83,117 48,280 Long-term liabilities: Long-term debt, net 381,598 260,390 Deferred tax liability, net 35,225 40,394 Deferred revenue 7,403 8,581 Lease liabilities 6,055 100 Other long-term liabilities 6,384 7,440 Total long-term liabilities 436,665 316,905 Total liabilities 519,782 365,185 Redeemable noncontrolling interests — 24,945 Stockholders’ equity: Common stock 5 5 Additional paid-in capital 1,580,336 1,569,725 Accumulated deficit (932,505 ) (961,689 ) Accumulated other comprehensive loss (272 ) (446 ) Treasury stock, at cost (12,718 ) — Total stockholders’ equity 634,846 607,595 Total liabilities and stockholders’ equity $ 1,154,628 $ 997,725 - --------- - - ------- -

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

Nine months ended September 30, 2019 2018 Operating Activities: Net income $ 30,820 $ 67,269 Adjustments to reconcile net income to net cash from operating activities: Stock-based compensation 11,164 9,559 Depreciation and amortization of acquired intangible assets 32,078 29,539 Impairment of intangible asset 50,900 — Reduction of right-of-use lease assets 3,117 — Deferred income taxes (23,343 ) (1,073 ) Amortization of premium on investments, net, and debt issuance costs 848 659 Accretion of debt discounts 189 125 Loss on debt extinguishment — 1,534 Gain on sale of a business (3,256 ) — Other 508 — Cash provided (used) by changes in operating assets and liabilities: Accounts receivable 352 4,636 Commissions receivable (19 ) 60 Other receivables (18 ) 3,149 Prepaid expenses and other current assets 13,828 1,369 Other long-term assets 497 (902 ) Accounts payable (2,346 ) (2,255 ) Commissions and advisory fees payable (602 ) (2,627 ) Lease liabilities (3,371 ) — Deferred revenue (21,694 ) (2,411 ) Accrued expenses and other current and long-term liabilities 6,595 (3,048 ) Net cash provided by operating activities 96,247 105,583 Investing Activities: Business acquisition, net of cash acquired (166,561 ) — Purchases of property and equipment (6,887 ) (5,340 ) Proceeds from sale of a business, net of cash 7,467 — Net cash used by investing activities (165,981 ) (5,340 ) Financing Activities: Proceeds from credit facilities 121,489 — Payments on credit facilities — (80,000 ) Stock repurchases (11,968 ) — Payment of redeemable noncontrolling interests (24,945 ) — Proceeds from stock option exercises 3,811 11,738 Proceeds from issuance of stock through employee stock purchase plan 1,144 1,608 Tax payments from shares withheld for equity awards (5,508 ) (5,983 ) Contingent consideration payments for business acquisition (943 ) (1,315 ) Net cash provided (used) by financing activities 83,080 (73,952 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash 38 (11 ) Net increase in cash, cash equivalents, and restricted cash 13,384 26,280 Cash, cash equivalents, and restricted cash, beginning of period 85,366 62,311 Cash, cash equivalents, and restricted cash, end of period $ 98,750 $ 88,591 - ------ - - ------ -

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

Three months ended Nine months ended September 30, September 30, 2019 2018 2019 2018 Revenue: Wealth Management (1) $ 145,428 $ 91,887 $ 362,791 $ 275,984 Tax Preparation (1) 3,588 3,498 205,733 183,214 Total revenue 149,016 95,385 568,524 459,198 Operating income (loss): Wealth Management 20,631 12,891 49,150 38,920 Tax Preparation (12,075 ) (6,936 ) 108,565 95,991 Corporate-level activity (2) (80,667 ) (16,647 ) (131,683 ) (53,740 ) Total operating income (loss) (72,111 ) (10,692 ) 26,032 81,171 Other loss, net (2,606 ) (3,863 ) (11,682 ) (11,850 ) Income tax benefit (expense) 12,331 818 16,470 (2,052 ) Net income (loss) $ (62,386 ) $ (13,737 ) $ 30,820 $ 67,269 - ------- - - ------- - - ------- - - ------- -

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

Three months ended Nine months ended September 30, September 30, 2019 2018 2019 2018 Wealth Management: Commission $ 52,623 $ 41,015 $ 137,851 $ 124,269 Advisory 75,579 41,443 176,746 120,802 Asset-based 13,618 6,979 36,530 21,457 Transaction and fee 3,608 2,450 11,664 9,456 Total Wealth Management revenue $ 145,428 $ 91,887 $ 362,791 $ 275,984 Tax Preparation: Consumer $ 4,280 $ 3,246 $ 190,908 $ 168,295 Professional (692 ) 252 14,825 14,919 Total Tax Preparation revenue $ 3,588 $ 3,498 $ 205,733 $ 183,214 - ------- - - ------ - ------- - -------

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

Three months ended Nine months ended September 30, September 30, 2019 2018 2019 2018 Operating expenses $ (6,476 ) $ (4,572 ) $ (19,802 ) $ (14,351 ) Stock-based compensation (4,639 ) (2,874 ) (11,164 ) (9,559 ) Acquisition and integration costs (6,759 ) — (17,739 ) — Depreciation (1,811 ) (930 ) (4,783 ) (4,056 ) Amortization of acquired intangible assets (10,082 ) (8,271 ) (27,295 ) (25,483 ) Impairment of intangible asset (50,900 ) — (50,900 ) — Restructuring — — — (291 ) Total corporate-level activity $ (80,667 ) $ (16,647 ) $ (131,683 ) $ (53,740 ) - ------- - - ------- - - -------- - - ------- -

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

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

(In thousands) Three Months Ended Nine months ended September 30, September 30, 2019 2018 2019 2018 Net income (loss) attributable to Blucora, Inc. (2) $ (62,386 ) $ (13,964 ) $ 30,820 $ 66,615 Stock-based compensation 4,639 2,874 11,164 9,559 Depreciation and amortization of acquired intangible assets 11,893 9,201 32,078 29,539 Restructuring — — — 291 Other loss, net (3) 2,606 3,863 11,682 11,850 Net income attributable to noncontrolling interests — 227 — 654 Acquisition and integration costs 6,759 — 17,739 — Income tax (benefit) expense (12,331 ) (818 ) (16,470 ) 2,052 Impairment of intangible asset 50,900 $ — 50,900 — Adjusted EBITDA $ 2,080 $ 1,383 $ 137,913 $ 120,560 - ------- - - ------- - - ------- - - -------

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

Three months ended Nine months ended September 30, September 30, 2019 2018 2019 2018 Net income (loss) attributable to Blucora, Inc. (2) $ (62,386 ) $ (13,964 ) $ 30,820 $ 66,615 Stock-based compensation 4,639 2,874 11,164 9,559 Amortization of acquired intangible assets 10,082 8,271 27,295 25,483 Impairment of intangible asset 50,900 — 50,900 — Gain on the sale of a business (3,256 ) — (3,256 ) — Acquisition and integration costs 6,759 — 17,739 — Restructuring — — — 291 Impact of noncontrolling interests — 227 — 654 Cash tax impact of adjustments to GAAP net income (710 ) (505 ) (1,892 ) (1,721 ) Non-cash income tax (benefit) expense (1) (15,593 ) (1,333 ) (23,759 ) 647 Non-GAAP net income (loss) $ (9,565 ) $ (4,430 ) $ 109,011 $ 101,528 Per diluted share: Net income (loss) attributable to Blucora, Inc. $ (1.28 ) $ (0.37 ) $ 0.62 $ 1.28 Stock-based compensation 0.10 0.06 0.23 0.19 Amortization of acquired intangible assets 0.19 0.18 0.55 0.52 Impairment of intangible asset 1.05 — 1.03 — Gain on the sale of a business (0.07 ) — (0.07 ) — Acquisition and integration costs 0.14 — 0.36 — Restructuring — — — 0.01 Impact of noncontrolling interests — 0.08 0.00 0.08 Cash tax impact of adjustments to GAAP net income (0.01 ) (0.01 ) (0.04 ) (0.03 ) Non-cash income tax (benefit) expense (0.32 ) (0.03 ) (0.48 ) 0.01 Non-GAAP net income (loss) per share $ (0.20 ) $ (0.09 ) $ 2.20 $ 2.06 Weighted average shares outstanding used in computing per 48,652 47,712 49,596 49,292 diluted share amounts

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

Ranges for the three Ranges for the year months ending ending September 30, 2019 December 21, 2019 Low High Low High Net loss attributable to Blucora, Inc. $ (35,500 ) $ (30,500 ) $ 27,000 $ 37,500 Stock-based compensation 4,900 4,900 16,700 16,300 Depreciation and amortization of acquired intangible assets 12,600 12,500 45,500 45,000 Other loss, net (3) 6,100 5,900 20,900 20,700 Acquisition and integration costs 6,500 6,100 22,400 22,000 Income tax expense 1,400 1,100 (2,000 ) (2,000 ) Adjusted EBITDA $ (4,000 ) $ — $ 130,500 $ 139,500 - ------- - - ------- - - ------- - - ------- -

Preliminary Non-GAAP Net Income Reconciliation for Prior Guidance (1)(Amounts in thousands)

Ranges for the year ending December 21, 2019 Low High Net income attributable to Blucora, Inc. $ 27,000 $ 37,500 Stock-based compensation 16,700 16,300 Amortization of acquired intangible asset 37,000 37,000 Acquisition and integration costs 22,400 22,000 Cash tax impact of adjustments to net income (2,000 ) (2,000 ) Non-cash income tax benefit (8,600 ) (8,300 ) Non-GAAP net income $ 92,500 $ 102,500 Per diluted share: Net income attributable to Blucora, Inc. $ 0.54 $ 0.75 Stock-based compensation 0.33 0.32 Amortization of acquired intangible asset 0.73 0.74 Acquisition and integration costs 0.44 0.44 Cash tax impact of adjustments to net income (0.04 ) (0.04 ) Non-cash income tax benefit (0.16 ) (0.17 ) Non-GAAP net income per share $ 1.84 $ 2.04 Weighted average shares outstanding used in computing per diluted share amounts 50,400 50,200

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

Ranges for the year ending December 31, 2019 Low High Net loss attributable to Blucora, Inc. $ (5,400 ) $ (400 ) Stock-based compensation 17,000 16,500 Depreciation and amortization of acquired intangible assets 45,500 45,000 Other loss, net (3) 19,000 18,000 Acquisition and integration costs 24,000 23,500 Impairment of intangible asset 51,000 51,000 Income tax benefit (20,600 ) (18,100 ) Adjusted EBITDA $ 130,500 $ 135,500 - ------- - - ------- -

Preliminary Non-GAAP Net Income (Loss) Reconciliation for Forward-Looking Guidance (1)(Amounts in thousands, except per share amounts)

Ranges for the year ending December 31, 2019 Low High Net loss attributable to Blucora, Inc. $ (5,400 ) $ (400 ) Stock-based compensation 17,000 16,500 Amortization of acquired intangible assets 37,500 37,500 Acquisition and integration costs 24,000 23,500 Impairment of intangible asset 51,000 51,000 Gain on sale of a business (3,300 ) (3,300 ) Cash tax impact of adjustments to net loss (2,300 ) (2,300 ) Non-cash income tax benefit (25,000 ) (23,000 ) Non-GAAP net income (loss) $ 93,500 $ 99,500 Per diluted share: Net loss attributable to Blucora, Inc. $ (0.11 ) $ (0.01 ) Stock-based compensation 0.34 0.33 Amortization of acquired intangible assets 0.76 0.76 Acquisition and integration costs 0.48 0.47 Impairment of intangible asset 1.03 1.03 Gain on sale of a business (0.07 ) (0.07 ) Cash tax impact of adjustments to net loss (0.05 ) (0.05 ) Non-cash income tax benefit (0.50 ) (0.45 ) Non-GAAP net income per share $ 1.88 $ 2.01 Weighted average shares outstanding used in computing per diluted share amounts 49,750 49,600

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

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

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

We define non-GAAP net income (loss) as net income (loss) attributable to Blucora, Inc., determined in accordance with GAAP, excluding the effects of stock-based compensation, amortization of acquired intangible assets, the impairment of an intangible asset, gain on the sale of a business, acquisition and integration costs (described further under Adjusted EBITDA above), restructuring costs (described further under Adjusted EBITDA above), the impact of noncontrolling interests, the related cash tax impact of those adjustments, and non-cash 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 net operating losses will expire, if unutilized, between 2020 and 2024. The aforementioned items are only included in non-GAAP net income (loss) in the periods they occurred.

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

(2) As presented in the Preliminary Condensed Consolidated Statements of Operations (unaudited).

(3) Other loss, net primarily includes items such as interest income, interest expense, amortization of debt issuance costs, accretion of debt discounts, and gain/loss on debt extinguishment.