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    
$ in millionsPrior GuidanceMidpointActualDifference at Midpoint
Wealth Management Revenue$139.0 - $145.5142.3 145.4 3.2 
TaxAct Revenue$3.5 – $4.03.8 3.6** (0.2)
Total Revenue$142.5 - $149.5146.0 149.0 3.0 
Wealth Management Segment Income$18.5 - $21.520 20.6 0.6 
TaxAct Segment Income($13.5) - ($14.0)(13.8)(12.0)1.7 
Corporate Unallocated Operating Expenses$8.0 - $8.58.3 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 Outlook
The 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.

$ in millionsPrior GuidanceCurrent OutlookDifference at Midpoint
Wealth Management Revenue$500.0 - $513.0$505.0 - $510.01.0 
TaxAct Revenue$210.0 - $211.0$209.5 - $210.5(0.5)
Total Revenue$710.0 - $724.0$714.5 - $720.50.5 
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 September 30, Nine months ended September 30,
 2019  2018  2019  2018 
Revenue:       
Wealth management services revenue$145,428  $91,887  $362,791  $275,984 
Tax preparation services revenue3,588  3,498  205,733  183,214 
Total revenue149,016  95,385  568,524  459,198 
Operating expenses:       
Cost of revenue:       
Wealth management services cost of revenue102,030  62,313  250,881  187,526 
Tax preparation services cost of revenue1,633  1,370  8,983  8,182 
Amortization of acquired technology—  —  —  99 
Total cost of revenue (1)103,663  63,683  259,864  195,807 
Engineering and technology (1)8,635  4,246  22,323  14,225 
Sales and marketing (1)19,976  15,675  104,804  94,719 
General and administrative (1)19,642  13,404  55,721  43,895 
Acquisition and integration6,759  —  17,739  — 
Depreciation1,470  798  3,846  3,706 
Amortization of other acquired intangible assets10,082  8,271  27,295  25,384 
Impairment of intangible asset50,900  —  50,900  — 
Restructuring (1)—  —  —  291 
Total operating expenses221,127  106,077  542,492  378,027 
Operating income (loss)(72,111) (10,692) 26,032  81,171 
Other loss, net (2)(2,606) (3,863) (11,682) (11,850)
Income (loss) before income taxes(74,717) (14,555) 14,350  69,321 
Income tax benefit (expense)12,331  818  16,470  (2,052)
Net income (loss)(62,386) (13,737) 30,820  67,269 
Net income attributable to noncontrolling interests—  (227) —  (654)
Net income attributable to Blucora, Inc.:$(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:       
Basic48,652  47,712  48,456  47,191 
Diluted48,652  47,712  49,596  49,292 

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

 Three Months Ended September 30, Nine months ended September 30,
 2019  2018  2019  2018 
Interest income$(52) $(119) $(341) $(217)
Interest expense5,469  3,744  14,015  11,772 
Amortization of debt issuance costs301  172  848  659 
Accretion of debt discounts66  38  189  125 
Loss on debt extinguishment—  —  —  1,534 
Gain on sale of a business(3,256) —  (3,256) — 
Other78  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,
2019		 December 31,
2018
ASSETS   
Current assets:   
Cash and cash equivalents$97,466  $84,524 
Cash segregated under federal or other regulations1,284  842 
Accounts receivable, net of allowance16,803  15,721 
Commissions receivable20,724  15,562 
Other receivables7,424  7,408 
Prepaid expenses and other current assets, net9,058  7,755 
Total current assets152,759  131,812 
Long-term assets:   
Property and equipment, net17,230  12,389 
Right-of-use assets, net10,199  — 
Goodwill, net663,005  548,685 
Other intangible assets, net301,533  294,603 
Other long-term assets9,902  10,236 
Total long-term assets1,001,869  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 payable18,871  15,199 
Accrued expenses and other current liabilities39,261  18,980 
Lease liabilities4,163  46 
Deferred revenue7,456  10,257 
Current portion of long-term debt, net1,227  — 
Total current liabilities83,117  48,280 
Long-term liabilities:   
Long-term debt, net381,598  260,390 
Deferred tax liability, net35,225  40,394 
Deferred revenue7,403  8,581 
Lease liabilities6,055  100 
Other long-term liabilities6,384  7,440 
Total long-term liabilities436,665  316,905 
Total liabilities519,782  365,185 
    
Redeemable noncontrolling interests—  24,945 
    
Stockholders’ equity:   
Common stock5  5 
Additional paid-in capital1,580,336  1,569,725 
Accumulated deficit(932,505) (961,689)
Accumulated other comprehensive loss(272) (446)
Treasury stock, at cost(12,718) — 
Total stockholders’ equity634,846  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 compensation11,164  9,559 
Depreciation and amortization of acquired intangible assets32,078  29,539 
Impairment of intangible asset50,900  — 
Reduction of right-of-use lease assets3,117  — 
Deferred income taxes(23,343) (1,073)
Amortization of premium on investments, net, and debt issuance costs848  659 
Accretion of debt discounts189  125 
Loss on debt extinguishment—  1,534 
Gain on sale of a business(3,256) — 
Other508  — 
Cash provided (used) by changes in operating assets and liabilities:   
Accounts receivable352  4,636 
Commissions receivable(19) 60 
Other receivables(18) 3,149 
Prepaid expenses and other current assets13,828  1,369 
Other long-term assets497  (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 liabilities6,595  (3,048)
Net cash provided by operating activities96,247  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 cash7,467  — 
Net cash used by investing activities(165,981) (5,340)
Financing Activities:   
Proceeds from credit facilities121,489  — 
Payments on credit facilities—  (80,000)
Stock repurchases(11,968) — 
Payment of redeemable noncontrolling interests(24,945) — 
Proceeds from stock option exercises3,811  11,738 
Proceeds from issuance of stock through employee stock purchase plan1,144  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 activities83,080  (73,952)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash38  (11)
Net increase in cash, cash equivalents, and restricted cash13,384  26,280 
Cash, cash equivalents, and restricted cash, beginning of period85,366  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 September 30, Nine months ended September 30,
 2019  2018  2019  2018 
Revenue:       
Wealth Management (1)$145,428  $91,887  $362,791  $275,984 
Tax Preparation (1)3,588  3,498  205,733  183,214 
Total revenue149,016  95,385  568,524  459,198 
Operating income (loss):       
Wealth Management20,631  12,891  49,150  38,920 
Tax Preparation(12,075) (6,936) 108,565  95,991 
Corporate-level activity (2)(80,667) (16,647) (131,683) (53,740)
Total operating income (loss)(72,111) (10,692) 26,032  81,171 
Other loss, net(2,606) (3,863) (11,682) (11,850)
Income tax benefit (expense)12,331  818  16,470  (2,052)
Net income (loss)$(62,386) $(13,737) $30,820  $67,269 

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

 Three months ended September 30, Nine months ended September 30,
 2019  2018 2019 2018
Wealth Management:       
Commission$52,623  $41,015 $137,851 $124,269
Advisory75,579  41,443 176,746 120,802
Asset-based13,618  6,979 36,530 21,457
Transaction and fee3,608  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 September 30, Nine months ended 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 September 30, Nine months ended September 30,
 2019  2018  2019  2018
Net income (loss) attributable to Blucora, Inc. (2)$(62,386) $(13,964) $30,820  $66,615
Stock-based compensation4,639  2,874  11,164  9,559
Depreciation and amortization of acquired intangible assets11,893  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 costs6,759  —  17,739  —
Income tax (benefit) expense(12,331) (818) (16,470) 2,052
Impairment of intangible asset50,900  $—  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 September 30, Nine months ended September 30,
 2019  2018  2019  2018 
Net income (loss) attributable to Blucora, Inc. (2)$(62,386) $(13,964) $30,820  $66,615 
Stock-based compensation4,639  2,874  11,164  9,559 
Amortization of acquired intangible assets10,082  8,271  27,295  25,483 
Impairment of intangible asset50,900  —  50,900  — 
Gain on the sale of a business(3,256) —  (3,256) — 
Acquisition and integration costs6,759  —  17,739  — 
Restructuring—  —  —  291 
Impact of noncontrolling interests—  227  —  654 
Cash tax impact of adjustments to GAAP net income(710) (505) (1,892) (1,721)
Non-cash income tax (benefit) expense (1)(15,593) (1,333) (23,759) 647 
Non-GAAP net income (loss)$(9,565) $(4,430) $109,011  $101,528 
Per diluted share:       
Net income (loss) attributable to Blucora, Inc.$(1.28) $(0.37) $0.62  $1.28 
Stock-based compensation0.10  0.06  0.23  0.19 
Amortization of acquired intangible assets0.19  0.18  0.55  0.52 
Impairment of intangible asset1.05  —  1.03  — 
Gain on the sale of a business(0.07) —  (0.07) — 
Acquisition and integration costs0.14  —  0.36  — 
Restructuring—  —  —  0.01 
Impact of noncontrolling interests—  0.08  0.00  0.08 
Cash tax impact of adjustments to GAAP net income(0.01) (0.01) (0.04) (0.03)
Non-cash income tax (benefit) expense(0.32) (0.03) (0.48) 0.01 
Non-GAAP net income (loss) per share$(0.20) $(0.09) $2.20  $2.06 
Weighted average shares outstanding used in computing per diluted share amounts48,652  47,712  49,596  49,292 


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

 Ranges for the three months ending Ranges for the year ending
 September 30, 2019 December 21, 2019
 Low High Low High
Net loss attributable to Blucora, Inc.$(35,500) $(30,500) $27,000  $37,500 
Stock-based compensation4,900  4,900  16,700  16,300 
Depreciation and amortization of acquired intangible assets12,600  12,500  45,500  45,000 
Other loss, net (3)6,100  5,900  20,900  20,700 
Acquisition and integration costs6,500  6,100  22,400  22,000 
Income tax expense1,400  1,100  (2,000) (2,000)
Adjusted EBITDA$(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 compensation16,700  16,300 
Amortization of acquired intangible asset37,000  37,000 
Acquisition and integration costs22,400  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 compensation0.33  0.32 
Amortization of acquired intangible asset0.73  0.74 
Acquisition and integration costs0.44  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 amounts50,400  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 compensation17,000  16,500 
Depreciation and amortization of acquired intangible assets45,500  45,000 
Other loss, net (3)19,000  18,000 
Acquisition and integration costs24,000  23,500 
Impairment of intangible asset51,000  51,000 
Income tax benefit(20,600) (18,100)
Adjusted EBITDA$130,500  $135,500 


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 compensation17,000  16,500 
Amortization of acquired intangible assets37,500  37,500 
Acquisition and integration costs24,000  23,500 
Impairment of intangible asset51,000  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 compensation0.34  0.33 
Amortization of acquired intangible assets0.76  0.76 
Acquisition and integration costs0.48  0.47 
Impairment of intangible asset1.03  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 amounts49,750  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.

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